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Answer the following questions using the information below: Knnrade's Engine Co currently manufactures part TE456. Monthly production costs for 1,000 units are: It is estimated
Answer the following questions using the information below: Knnrade's Engine Co currently manufactures part TE456. Monthly production costs for 1,000 units are: It is estimated that 20% 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 now has the option of purchasing the part from an outside supplier at $89 per unit. If Konrade's Engine Company accepts the offer from the outside supplier, what is the monthly total avoidable costs (i.e. costs that will no longer be incurred)? A. $80,000 B. $84,000 C. $96,000 D. $100,000
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