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X Company is considering buying a part in 2022 that it currently makes. The budgeted cost function to produce the part is $10.25X + $14,190,
X Company is considering buying a part in 2022 that it currently makes. The budgeted cost function to produce the part is $10.25X + $14,190, where X is the number of units produced. A company has offered to supply this part to X Company for $12.85 per unit. If X Company chooses to buy the part, it will still incur fixed costs of $5,534, but it will be able to sell some of the equipment that it used to make the part for $2,100. In 2021, 3,300 units of the part were produced; in 2022, 3,700 units will be needed. If X Company buys the part in 2022 instead of making it, it will save At what production level would X Company be indifferent between making and buying the part in 2022
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