Question: Answer the following question(s) using the information below. Mable's Engine Company manufactures part Z92 used in several of its engine models. Monthly production costs for
Answer the following question(s) using the information below. Mable's Engine Company manufactures part Z92 used in several of its engine models. Monthly production costs for 1,000 units are as follows: Direct materials Direct labour Variable overhead costs Fored overhead costs Total costs $30,000 8,000 21.000 5.000 $84,000 Mable's Engine Company has the option of purchasing the part from an outside supplier at S61 per unit. It is estimated that all of the fixed overhead costs assigned to Z92 will remain if the company purchases Z02 from the outside supplier. If Mables's Engine Company purchases 1.000 Z82 parts from the outside supplier per month, then its monthly operating income will A. decrease by $48,000. B. decrease by $40,000. C. decrease by 52.000. D. decrease by $23,000. E. increase by $3.000.
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