QUESTION 6 Genent's Engine Company manufactures part TE456 used in several of its engine models. Monthly production costs for 1070 units are as follows: Direct materials Direct labor Variable overhead costs Fixed overhead costs Total costs $43,000 10,500 29,500 19,000 $102,000 It is estimated that 8% of the fixed overhead costs assigned to TE456 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 $92.75 per unit. If Genent's Engine Company purchases 1070 TE456 parts from the outside supplier per month, then its monthly operating income will decrease by $28,263 increase by $14,723 increase by $28,263 decrease by $14,723 QUESTION 7 Jupiter Corporation incurred fixed manufacturing costs of $17,000 during 2015. Other information for 2015 includes: The budgeted denominator level is 2500 units. Units produced total 1800 units. Units sold total 2800 units. Variable cost per unit is $6 Beginning inventory is zero. The fixed manufacturing cost rate is based on the budgeted denominator level. Under absorption costing, the production-volume variance is 0 $2500 $4760 $2040