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Question 4 Markman Industries employs a standard cost system. It has established the following standards for the prime costs of its air rifle product line: During November, Markman purchased 13,000kg of direct materials at a total cost of $295,100. The total factory wages for November were $38,000,90% of which were for direct labour. Markman manufactured 3,500 air rifles during November, using 13,500kg of direct materials and 1,900 direct labour hours. Required: a) What was the direct materials purchase price variance for November? b) What was the direct materials quantity variance for November? c) What was the direct labour rate variance for November? d) What was the direct labour efficiency variance for November? e) Over the past year, Markman's management team attempted to reduce the number of customer complaints relating to the product by sourcing higher-quality direct materials from a different supplier. Explain the effect this has had on direct materials costs. f) Continuing from part (e), explain, using the CPA Way, how the use of a dashboard (type of graph or summary data) could help the management team continue to monitor customer satisfaction based on the quality of direct materials and at the same time control the cost of direct materials and increase sales. Your explanation should include key performance indicators, their likely sources, and a description of how this would be presented on a dashboard. Question 5 Kesla Inc. manufactures a unique fuel injection system that yields dramatic cost savings through improved fuel efficiency. The effectiveness of the system is dependent upon the quality of a specialized sensor. These sensors are purchased from an external supplier for $21 each. For the past few years, an average of 10% of the sensors purchased from the supplier have not met Kesla's quality requirements. The number of unusable sensors has ranged from 5% to 25% of the total number purchased and has resulted in failures in meeting CPA 4/20 Ir Questions (Intermediate Management Accounting) production schedules. In addition, Kesla has incurred additional costs to replace the defective units because the rejection rate of the units is within the range agreed upon in the contract. Kesla is considering a proposal from its engineering department to manufacture the sensors internally. Kesla has the facilities and equipment to producte the components. The engineering department has designed a manufacturing system that will produce the sensors with a defect rate of 5% of the number of units produced. The following schedule presents the engineers' estimates of the probabilities that different levels of variable manufacturing cost per sensor will be incurred under this system. Additional annual fixed costs incurred by Kesla, if it manufactures the sensor, will amount to $42,500. Kesla will need 18,000 sensors to meet its annual demand requirements. Required: a) Prepare an expected-value analysis to determine whether Kesla should manufacture the sensors. b) The engineers used internal costing records of similar internal processes when estimating the probabilities of variable manufacturing costs. However, they realized the estimates of the probability did not take into account that the new manufacturing system consisted of newer, more efficient machines and a different gauge of steel. Identify other sources of data that could reduce the estimated range of variable manufacturing cost per sensor