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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
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 $13.28 per unit. This year's production costs for 3,400 units were as follows: Direct materials Direct labor Total overhead Total costs Per-Unit $2.40 4.46 8.20 $15.06 Total $8,160 15,164 27,880 $51,204 $13,940 of total overhead is fixed. If X Company chooses to buy the part, it will avoid fixed costs of $8,225. 1. If X Company buys the part next year instead of making it, and production is expected to remain at 3,400 units, it will save OA: $298|OB: $337 C: $380 OD: $430 OE: $486| OF: $549 Submit Answer Tries 0/99 2. If X Company makes the part next year instead of buying it, and production next year is expected to be 3,800 units, it will save A: $303|OB: $378| OC: $473|OD: $591|OE: $739 F: $924
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