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

question 144

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.
-The maximum price that Genent's Engine Company should be willing to pay the outside supplier is ________.

• A) $92 per TE456 part
• B) $93.84 per TE456 part
• C) $115 per TE456 part
• D) $116.84 per TE456 part

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Definitions:

Paleolithic

Relating to the earliest period of the Stone Age, characterized by the use of rudimentary chipped stone tools by early humans.

Precambrian

The earliest part of Earth's history, spanning the time from the formation of the planet up to 541 million years ago, before the Cambrian period.

Enculturation

The process through which individuals learn and acquire the culture of their society or group, often happening naturally through interactions within the community.

Hegemony

Predominance or influence of one group over others, often seen in political, cultural, or social contexts.