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X Company currently buys a part from a supplier for $13.84 per unit but is considering making the part itself next year. This year, they

X Company currently buys a part from a supplier for $13.84 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 $3.16 $10,428
Direct labor 4.18 13,794
Variable overhead 3.70 12,210
Fixed overhead 3.70 12,210
Total $14.74 $48,642

Of the estimated fixed overhead, $6,593 would be additional fixed overhead costs; the remainder would be common costs allocated to the part. X Company currently receives $2,800 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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