It is currently Q4 2022 and Corad company is completing their budgeting process for 2023. Below is the information used to complete the budgets:

Expected Sales units:Q1 24,000 units with a 10% increase each quarterEnding raw materials inventory:30% of the next quarters expected production requirementsEnding finished goods inventory:15% of next quarter's expected sales unitsQ4 Production Budget32,423 units

Raw materials are expected to cost $12 per pound, and each unit of production is expected to use 2 pounds of raw materials. Required (10 Marks - show all steps) A) The Chief Operating Officer wants to know how much the company is planning to spend on Direct Materials for each quarter for the first 3 quarters of the year. Prepare the necessary calculations to answer this question.

B) In Q3 the company actually produced 31,000 units and spent $720,000 on direct materials purchases. Management wants to know what their flexible variance for direct materials was in Q3. Calculate this variance and discuss a few possible reasons for the favourable or unfavourable variance? C) This company is looking to make a large $1,000,000 capital investment in Q2. One manager wants to use Profitability Index and another would like to use NPV to help them make the decision. Describe the difference between these two and why a company might choose one over the other.