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X Company currently buys a part from a supplier for $12.02 per unit but is considering making the part itself next year. This year, they

X Company currently buys a part from a supplier for $12.02 per unit but is considering making the part itself next year. This year, they purchased 3,300 units of this part; next year, they will need 3,800 units. Estimated costs to make the part next year are:

Per-Unit Total
Direct materials $3.25 $10,699
Direct labor 3.94 12,317
Variable overhead 3.80 11,460
Fixed overhead 4.20 12,730
Total $15.19 $47206

Of the estimated fixed overhead, $6,458 would be additional fixed overhead costs; the remainder would be common costs allocated to the part. X Company currently receives $2,500 a year by renting unused factory space, but it will have to use this space to make the part.

If X Company makes the part instead of continuing to buy it, it will save

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