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X Company is considering buying a part next year that they currently make. This year's production costs for 3,500 units were as follows: Per-Unit Total

X Company is considering buying a part next year that they currently make. This year's production costs for 3,500 units were as follows:

Per-Unit Total
Direct materials $3.03 $10,605
Direct labor 3.13 10,955
Variable overhead 4.20 14,700
Fixed overhead 5.50 19,250
Total $15.86 $55,510

A company has offered to supply this part to X Company for $13.77 per unit. If X Company accepts the offer, it will still incur fixed costs of $9,818, but it will be able to lease the resources that will become available from not making the part for $2,800. At what production level would X Company be indifferent between making and buying the part next year?

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