2. Konrade's Engine Company manufactures part TE456 used in several of its engine models. Monthly production costs for 1,000 units are as follows: Direct materials $ 40,000 Direct labor 10,000 Variable overhead costs 30,000 Fixed overhead costs 20,000 Total costs $100,000It is estimated that 10% of the fixed overhead costs assigned to TE456 will no longer be incurred if the company purchases TE456 from the outside supplier. Konrade's Engine Company has the option of purchasing the part from an outside supplier at $85 per unit.i. If Konrade's Engine Company accepts the offer from the outside supplier, the monthly avoidable costs (costs will no longer be incurred) total?ii. If Konrade's Engine Company purchases 1,000 TE456 parts from the outside supplier per month, then its monthly operating income will be?iii. The maximum price that Konrade's Engine Company should be willing to pay the outside supplier is?

2. Konrade's Engine Company manufactures part TE456 used in several of its engine models. Monthly production costs for 1,000 units are as follows: Direct materials $ 40,000 Direct labor 10,000 Variable overhead costs 30,000 Fixed overhead costs 20,000 Total costs $100,000 It is estimated that 10% of the fixed overhead costs assigned to TE456 will no longer be incurred if the company purchases TE456 from the outside supplier. Konrade's Engine Company has the option of purchasing the part from an outside supplier at $85 per unit. 8 i. If Konrade's Engine Company accepts the offer from the outside supplier, the monthly avoidable costs (costs will no longer be incurred) total? ii. If Konrade's Engine Company purchases 1,000 TE456 parts from the outside supplier per month, then its monthly operating income will be? The maximum price that Konrade's Engine Company should be willing to pay the outside supplier is