2) In producing 700 units of product last period, Azure Company used 5,000 pound

Question

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

Explanation / Answer

Dear Student Thank you for using Chegg Please find below the answer and please give thumbs up   Statementshowing Computations Particulars Quantity Rate amount Quantity Rate amount Materials              5,040.00                      7.50            37,800.00              5,000.00                      6.85            34,250.00 Actual Output                  700.00 Pound per unit                      7.20 Total pound required = 700 * 7.2              5,040.00 DMPV = (SP-AP)*AQ purchased DMPV = (7.50 - 6.85)5000 DMPV = 3,250 Favourable DMQV= (SQ-AQ)SP DMQV= (5040 - 5000)7.50 DMQV= 300 Favourable

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