1.

Different standards have different impact on motivation. In the given case, where
the labor standard recommended by the engineering firm is adopted by Geeta &
company, the six-month operation period showed a decline in production and an
unfavorable quantity variance for each of the six months in the said period. In the
other case where the management used the internally set labor standard, there was
a favorable quantity variance for the first three months ; thereby implying that the
actual production was more than the standard production. In the fourth month,
there was no variance in production and in the fifth and sixth month, there was an
unfavorable variance, thereby implying that the actual production was less than
standard production. Thus, we see that the standard recommended by the
engineering firm had a negative impact on motivation as it was less than the
standard production. But, in the case of internally set standards, there was a
positive impact on motivation for first three months; neutral in the fourth month;
and negative impact in fifth and sixth month.

2.
The labor standard recommended by the consulting firm should not be used as a
motivational device as it is having a negative impact.
The cost standard used for reporting had a positive or neutral impact for greater
part of the period and a negative impact for two months. Therefore, the company
should try and adopt labor standards similar to those ones.