Read the following recent article:
High Steel Prices Have Manufacturers Scrounging for Supplies; Companies hunt for metal and hire help to find supplies; steel industry says 'we are producing as much as we can'
Hufford, Austen. Wall Street Journal
Manufacturers are facing the highest steel and aluminum prices in years, another hurdle for U.S. companies already struggling to make enough cars, cans and other products.
Rapidly increasing metal costs are pushing manufacturers to take what steel they can get and hire more people to seek out available supplies, company executives said. The rising costs are flowing through to some producers of consumer goods: Campbell Soup Co. is paying more to get the cans it fills with tomato soup; Peloton Interactive Inc. is seeing prices rise for parts that go into its stationary bikes; and Steelcase Inc. is paying more to make metal desks and filing cabinets. Car makers like Ford Motor Co. and General Motors Co. are also dealing with rising metal prices.
"It's crazy for steel," said Brian Nelson, president of HCC Inc., which sells large metal accessories to tractor manufacturers. "I can't even get material at times."
A Midwest steel index calculated by CRU Group estimated prices at $1,940 a ton at the start of September, up from around $560 in September for both 2019 and 2020. A U.S. government index tracking the price of steel and iron nearly doubled in August from the year before, the biggest relative increase since records began in the 1920s.
Question: Imagine that you are the accountant for a local manufacturer of trailers and you use steel in many of the parts of your trailers. Aluminum is used for the tops of your covered trailers. You have used standard costs for many years in the business. From the information above, your first post should explain what is most likely happening to your variances when you analyze them for making trailers. Be specific as to which variances will be impacted and in what way.