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X Company is considering buying a part next year that they currently make. This year's production costs for 3,200 units were as follows: X Company
X Company is considering buying a part next year that they currently make. This year's production costs for 3,200 units were as follows:
X Company is considering buying a part next year that they currently make. This year's production costs for 3,200 units were as follows: Direct materials Direct labor Variable overhead Fixed overhead Total Per-Unit $2.37 4.30 3.00 4.30 $13.97 Total $7,584 13,760 9,600 13,760 $44,704 A company has offered to supply this part to X Company for $12.89 per unit. If X Company accepts the offer, it will still incur fixed costs of $6,605, but it will be able to lease the resources that will become available from not making the part for $2,600. At what production level would X Company be indifferent between making and buying the part next yearStep by Step Solution
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