(Three-part problem) Joseph Engine Company manufactures part…
Questions
(Three-pаrt prоblem) Jоseph Engine Cоmpаny mаnufactures part TE456 used in several of its engine models. Monthly production costs for 1,000 units are as follows: Direct materials $46,000 Direct labor 11,500 Variable overhead costs 34,500 Fixed overhead costs 23,000 Total costs $115,000 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. Joseph Engine Company has the option of purchasing the part from an outside supplier at $97.75 per unit. If Joseph Engine Company purchases 1,000 TE456 parts from the outside supplier per month, then its monthly operating income will ________.