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Answer the following questions using the information below: Konrade's Engine Company manufactures part TE456 used in several of its engine models. Monthly production costs for
Answer the following questions using the information below: 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 Direct labor Variable overhead costs Fixed overhead costs 40,000 10,000 30,000 20.000 $100,000 Total costs 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
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