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2) In producing 700 units of product last period, Azure Company used 5,000 pounds of Material K costing $34,250. The company has established the standard
2) In producing 700 units of product last period, Azure Company used 5,000 pounds of Material K costing $34,250. The company has established the standard of using 7.2 pounds of Material K per unit of product, at a price of $7.50 per pound. Calculate the materials price and quantity variances associated with producing the 700 units, and indicate whether they are favorable or unfavorable: 3) Quinta Inc. manufactures machine parts for aircraft engines. The CEO is considering an offer from a subcontractor who would provide 2,800 units of product QR128 for a price of S190,000.1 Quinta does not purchase these parts from the subcontractor it must produce them in-house with the following costs: Direct Materials Direct Labor Variable Overhead $22 18 14 Allocated Fixed Factory Overhead 16 Allocated Fixed Selling Costs Total Cost $75 If Quinta produces part QR128, there would also be incremental fixed costs of $13,000 p period. Should Quinta Inc. accept the offer from the subcontractor? C-1
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