16 Zintendo, Co. is a gaming system manufacturer. Each month, the firm produces 5,000 units of a microchip which is used in the assembly of each gaming system. The per unit cost of producing each microchip is as follows: Direct materials Direct labor Variable OH Fixed OH Total manufacturing costs $39 $15 $7 $4 $65 The microchip can be purchased from an outside supplier at $64 per unit. If the part is purchased from the outside supplier, 50% of the total fixed OH costs incurred in producing the part can be avoided. The financial advantage (disadvantage) for the company as a result of buying the part from the outside supplier would be per month: a. $15,000 ($15,000) C. $10,000 d. ($5,000) Oe. $5,000 QUESTION 17 The following information was given on the December flexible budget for Waterfall, Inc. at 20,000 units of production: Total Sales: $900,000 Total Variable Costs: $380,000 Total Fixed Costs: $460,000 Calculate the operating income that would be expected if the company produces and sells 25,000 units in December. a. $190,000 b. $75,000 c. $60,000 d. $285,000 e. $48,000