Katharine Mcknight is the owner of Groovy Bikes , a company that produces high quality cross country bicycles , Groovy Bikes participa shops For

Katharine Mcknight is the owner of Groovy Bikes , a company that produces high quality cross country bicycles , Groovy Bikes participa
shops For several years Groovy
Bikes has
purchased titanium from suppliers in the supply chain
Groovy Bikes uses titanium for the bicycle frames because it is stronger and lighter than other metals and in
las in a supply chain that consists of suppliers manufacturers distributors and alke bleycle shops For several years Grow
fare increases the quality of the bicycle Earlier this year Groovy Bikes h
red Michael Gammaro , a
asing manager
Michael believed that he could reduce costs it he
purchased titanium from an online marketplace at a lower price
( Click the icon to view the standard and actual information )
Read the requirements
@ Data Table
@ Requirements
Requirement 1 . Compute the direct materials price and efficiency vari
established the following standards based upon the
Let’s begin by calculating the cost for !
company experience with their previous suppliers . The standards are
1 . Compute the direct materials price and efficiency varian
for the actual input at the budgeted price .
company’s experien
as follows
at factors can explain the variances identified in requirement 1 ? Could
any other variances be affected ?
Actual input
Budgeted price
8 24 per pound
3 . Was switching suppliers a good idea for Groovy Bikes ? Explain why or why
Direct materials ( purchases )
Titanium used per bicycle
Direct materials ( usage )
Should Michael Gammaro’s performance evaluation be based solely on price
Actual results for the first month using the online supplier of titanium
Variances ? Should the production manager’s evaluation be based solely on
are as follows
shiciency variances ? Why is it important for Katharine Mcknight to
understand the causes of a variance before she evaluates performance ?
Bicycles produced
5 . Other than performance evaluation , what reasons are there for calculating
Thanum purchased
4 500 lb for $1 12.700

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