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:

Variable-Interval Reinforcement

A reinforcement schedule in which rewards are provided after an unpredictable time interval, leading to reasonably steady response rates.

Slot Machines

Gambling devices that generate random combinations of symbols on a dial, offering players the chance to win money based on the alignment of these symbols.

Extinguish

In psychology, to diminish a conditioned response by repeatedly presenting the conditioned stimulus without the unconditioned stimulus.

Negative Reinforcement

A behavioral psychology principle where the removal of an unfavorable outcome or stimulus strengthens a behavior or increases its likelihood of recurrence.