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X Company is considering buying a part next year that they currently make. This year's production costs for 3,100 units were: Total Per-Unit Direct materials

X Company is considering buying a part next year that they currently make. This year's production costs for 3,100 units were:

Total Per-Unit
Direct materials $8,339 $2.69
Direct labor 9,641 3.11
Variable overhead 8,370 2.70
Fixed overhead 11,160 3.60
Total $37,510 $12.10

A company has offered to supply this part for $11.00 per unit. If X Company buys the part, $6,138 of the fixed overhead can be avoided. Also if X Company buys the part, it can use the freed-up resources to increase production of another product, resulting in additional contribution margin of $2,500. Production next year is expected to be 3,600 units.

1) If X Company continues to make the part instead of buying it, it will save ______?

2) X Company is uncertain what production will be next year. What production level would make X Company indifferent between making and buying the part?

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