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#1 and 2 X Company is considering buying a part next year that it currently makes. The budgeted cost function to produce the part is

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#1 and 2

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X Company is considering buying a part next year that it currently makes. The budgeted cost function to produce the part is $11.17X + $16,000, where X is the number of units produced. A company has offered to supply this part to X Comany it for $13.62 per unit. If X Company chooses to buy the part, it will still incur fixed costs of $8,000, but it will be able to lease the resources that will become available from not making the part for $2,800. 1. If X Company buys the part next year instead of making it, and production is expected to remain at 3,200 units, it will save OA: $2,051 OB: $2,318 OC: $2,619 OD: $2,960 OE: $3,345 OF: $3,780 Submit Answer Tries 0/99 2. If X Company buys the part next year instead of making it, and production next year is expected to be 3,700 units, it will save OA: $392 OW: $569 OC: $825 OD: $1,197 OE: $1,735 OF: $2,516 Submit Answer |Tries 0/99 Post Discussion Send Feedback

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