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
Materials		$10,757	$3.47
Direct labor [all variable]		10,540	3.40
Variable overhead		8,060	2.60
Fixed overhead		14,570	4.70
Totals		$43,927	$14.17

A company has offered to supply this part for $11.95 per unit. If X Company buys the part, $8,305 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 $2,800. Production next year is also expected to be 3,100 units. 3. If X Company buys the part instead of making it, it will save $3,417

You are correct. Your receipt no. is 161-4791

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4. X Company is uncertain what production will be next year. At what production level would it be indifferent between making and buying the part?