Question
X Company is considering buying a part next year that they currently make. This year's total production costs for 3,200 units of this part were:
X Company is considering buying a part next year that they currently make. This year's total production costs for 3,200 units of this part were:
Materials | $8,480 |
Direct labor [all variable] | 11,520 |
Variable overhead | 13,120 |
Fixed overhead | 13,120 |
Total | $46,240 |
A company has offered to supply this part for $11.37 per unit. If X Company buys the part, $6,560 of the fixed overhead can be avoided. 14. If production next year is expected to be the same as this year, how much can X Company save by buying the part instead of making it?
15. If production next year is expected to be 3,600 units, how much can X Company save by buying the part instead of making it?
Please fill in the blank
Question 14 :( )
Question 15:( )
thanks!
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started