Answer the Following Questions Using the Information Below

question 35

Multiple Choice

Answer the following questions using the information below:
Donald's Engine Company manufactures part TE456 used in several of its engine models. Monthly production costs for 1,000 units are as follows:
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. Donald's Engine Company has the option of purchasing the part from an outside supplier at $42.50 per unit.
-If Donald's Engine Company purchases 1,000 TE456 parts from the outside supplier per month, then its monthly operating income will:

• A)increase by $1,000
• B)increase by $40,000
• C)decrease by $1,500
• D)decrease by $42,500

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Definitions:

Research Error

A mistake or discrepancy that occurs during the process of gathering, analyzing, interpreting, or presenting research data.

Big Data

Pertains to immensely vast collections of data that can be examined through computational methods to uncover patterns, trends, and relationships, particularly in the context of human behavior and interactions.

Velocity

The speed at which the data are generated.

Continuity Correction

An adjustment made to a discrete probability distribution to better approximate a continuous distribution, often used in binomial and normal distribution approximation.