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Questions 2 and 3 refer to the following information: X Company currently buys a part from a supplier for $12.61 per unit but is considering
Questions 2 and 3 refer to the following information: X Company currently buys a part from a supplier for $12.61 per unit but is considering making the part itself next year. This year, they purchased 3,500 units of this part. Estimated costs to make the part are: Direct materials Direct labor Variable overhead Fixed overhead Total Per-Unit $2.72 3.75 3.90 5.60 Total 9,520 13,125 13,650 19,600 $15.97 $55,895 Of the estimated fixed overhead, $7,644 are common costs that would be allocated to the part; the rest would be additional fixed overhead costs. X Company currently rents unused factory space to a tenant for $2,300; it wil have to use this space to make the part. 2. If X Company will need 3,500 units again next year and continues to buy the part instead of making it, it will save Submit Answer Tries 0/3 3. X Company is somewhat uncertain how many units of the part it will need next year. How many units would make the company indifferent between continuing to buy the part and making it? Submit Answer Tries 0/3
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