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Genent's Engine Company manufactures partTE456 used in several of its engine models. Monthly production costs for 1070 units are as follows: Duct materiale 141.000 Direct
Genent's Engine Company manufactures partTE456 used in several of its engine models. Monthly production costs for 1070 units are as follows: Duct materiale 141.000 Direct labor 7500 Vantable owerhead coute 21.500 Poved own coute 20,000 Totalco 2009 It is estimated that of the fived overhead costs assigned to T2456 will no longer be incurred if the company purchases TE456 from the outside supplier. Genent's Engine Company has the option of purchasing the part from an outside supplier at $24.75 per unit. If Genents Engine Company purchases 1070 T456 parts from the outside supplier per month, then its monthly operating income will increase by 521783 decrease by 521,783 increase by 532.483 decrease by 532.489
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