Answer the Following Questions Using the Information Below:
Genent's Engine

question 13

Multiple Choice

Answer the following questions using the information below:
Genent's Engine Company manufactures part TE456 used in several of its engine models. Monthly production costs for 1,000 units are as follows:
$\begin{array}{lr}\text { Direct materials } & \$ 46,000 \\\text { Direct labor } & 11,500 \\\text { Variable overhead costs } & 34,500 \\\text { Fixed overhead costs } & 23,000 \\\quad \text { Total costs } & \$ 115,000\end{array}$ 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 $97.75 per unit.
-If Genent's Engine Company accepts the offer from the outside supplier,the monthly avoidable costs (costs that will no longer be incurred) total ________.

• A) $93,840
• B) $92,000
• C) $115,000
• D) $116,840

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Definitions:

Trial Close

A technique used in sales to gauge a prospect's readiness to buy, by asking opinion-seeking questions regarding the product or deal before the final close.

Product's Benefits

The advantages or positive outcomes a consumer can expect from using a product.

Self-preservation

The instinctual behavior to protect oneself from harm or danger, influencing personal and professional decisions.

Sales Presentation

A Sales Presentation is a formal pitch used by salespeople to introduce and sell a product or service to potential buyers, highlighting benefits and addressing objections.