Define quantity standards and price standards as used in the standard cost method

You are the executive responsible for overseeing the Burberry Womens Sportswear and Accessories Department. Several events have transpired with the suppliers of raw materials that may adversely impact the supply chain. There has been severe weather in Peru, which is where some of the raw material comes from to manufacture apparel products. Fuel prices have risen in several countries where you obtain material for the synthetic fabrics. Several of the ranches where you purchase material for your leather goods have reduced the size of their herds.

1 Prepare a /recommendations/report on the impact of these events on the cost of raw materials as well as the operational and financial implications for the Womans Sportswear and Accessory Department.

2 You must also propose the best course of action in light of these events.

This might include maintaining existing sales prices and consequently operate with lower margins; pass the cost increases along to customers in the form of higher prices; lower the raw material costs; or consider alternative products. In order to formulate your response, you will want to carefully consider the problem, examine the pros and cons of each alternative under consideration, and document your recommendations using sound arguments that are well supported.