Reference no: EM132597737

Question 1: ACME Engine Company manufactures part AC2255 used in several of its engine models. Monthly production costs [in EUR] for 1,190 units are as follows: Direct materials 47,500 EUR; direct labor 13,500 EUR; variable overhead costs 31,500 EUR; fixed overhead costs 21,000 EUR (so a total costs of 113,500 EUR). 8% of the fixed overhead costs will no longer be incurred if the company purchases AC2255 from the outside supplier. ACME Engine Company has the option of purchasing the part from an outside supplier at 96.75 EUR per unit. If the company accepts the offer from the outside supplier, the monthly avoidable costs (costs that will no longer be incurred) total [in EUR] are