The following information is for Questions 1 and 2

X Company is considering buying a part next year that they currently make. A company has offered to supply it for $12.83 per unit. This year's production costs for 3,500 units were as follows:

Per-UnitTotalDirect materials$2.92$10,220Direct labor4.1314,455Total overhead8.8030,800Total costs$15.85$55,475

$10,500 of total overhead is variable. If X Company chooses to buy the part, it will still incur fixed costs of $8,323.

1. If X Company buys the part next year instead of making it, and production is expected to remain at 3,500 units, it will save

A: $1,378B: $1,557C: $1,760D: $1,988E: $2,247F: $2,539Tries 0/99

2. If X Company buys the part next year instead of making it, and production next year is expected to be 3,900 units, it will save

A: $1,135B: $1,646C: $2,386D: $3,460E: $5,017F: $7,275

X Company is considering buying a part next year that they currently make. A company has offered to supply it for $12.83 per unit. This year's production costs for 3,500 units were as follows: Per-Unit Total Direct materials $2.92 $10,220 Direct labor 4.13 14,455 Total overhead 8.80 30,800 Total costs $15.85 $55,475 $10,500 of total overhead is variable. IfX Company chooses to buy the part, it will still incur xed costs of $8,323. 1. If X Company buys the part next year instead of making it, and production is expected to remain at 3,500 units, it will save IOA: $1,378lOB: $1,557 lOc: $1,760 IO D: $1,988'OE: $2,247'OF: $2,539' Tries 0/99 2. If X Company buys the part next year instead of making it, and production next year is expected to be 3,900 units, it will save [Om $1,135]OB: $1,646 'OC: $2,386 [0 D: $3,460'OE: $5,017'OF: $7,275