Tom scott is the owner, president, and primary salesperson for scott manufacturing. because of this, the company's profits are driven by the amount of work tom does. if he works 40 hours each week, the company's ebit will be $650,000 per year; if he works a 50-hour week, the company's ebit will be $825,000 per year. the company is currently worth $4.2 million. the company needs a cash infusion of $2.3 million and can issue equity or issue debt with an interest rate of 10 percent. assume there are no corporate taxes.

Doogan corporation makes a product with the following standard costs: standard quantity or hours standard price or rate direct materials 2.0 grams $ 7.00 per gram direct labor 1.6 hours $ 12.00 per hour variable overhead 1.6 hours $ 6.00 per hour the company produced 5,000 units in january using 10,340 grams of direct material and 2,320 direct labor-hours. during the month, the company purchased 10,910 grams of the direct material at $7.30 per gram. the actual direct labor rate was $12.85 per hour and the actual variable overhead rate was $5.80 per hour. the company applies variable overhead on the basis of direct labor-hours. the direct materials purchases variance is computed when the materials are purchased. the materials quantity variance for january is: