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:
Mable's Engine Company has the option of purchasing the part from an outside supplier at $61 per unit.It is estimated that all of the fixed overhead costs assigned to Z92 will remain if the company purchases Z92 from the outside supplier.
-If Mable's Engine Company accepts the offer from the outside supplier, the monthly avoidable costs (costs that will no longer be incurred)total
A)$59,000.
B)$38,000.
C)$64,000.
D)$15,000.
E)$21,000.

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 1,000 units are as follows:
  Mable's Engine Company has the option of purchasing the part from an outside supplier at $61 per unit.It is estimated that all of the fixed overhead costs assigned to Z92 will remain if the company purchases Z92 from the outside supplier.
-If Mable's Engine Company accepts the offer from the outside supplier, the monthly avoidable costs (costs that will no longer be incurred)total
A)$59,000. 
B)$38,000. 
C)$64,000. 
D)$15,000. 
E)$21,000.

Quizplus · Accepted Answer

The avoidable costs are the costs that Mable's Engine Company will not incur if they accept the offer from the outside supplier. The total avoidable costs are given as $59,000.

Answer the Following Question(s)using the Information Below