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X Company currently makes a part and is considering buying it next year from a company that has offered to supply it for $16.60 per
X Company currently makes a part and is considering buying it next year from a company that has offered to supply it for $16.60 per unit. This year, total costs to produce 70,000 units were: $532,000 308,000 Direct materials Direct labor Variable overhead Fixed overhead 252,000 329,000 If X Company buys the part, $46,060 of the fixed overhead is avoidable. The resources that will become idle if they choose to buy the part can be used to increase production of another product, resulting in additional total contribution margin of $10,000. The marketing manager estimates that demand next year will increase to 74,150 units. If X Company continues to make the part instead of buying it, it will save A: $15,462 OB: $18,090OC: $21,165 OD: $24,763 OE: $28,973 OF: $33,899
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