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X Company is considering buying a part next year that they currently make. This year's total production costs for 3,000 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 3,000 units of this part were:

Materials $8,400
Direct labor [all variable] 10,530
Variable overhead 8,700
Fixed overhead 10,200
Total $37,830

A company has offered to supply this part for $10.35 per unit. If X Company buys the part, $5,304 of the fixed overhead can be avoided.

If production next year is expected to be 3,300 units, how much can X Company save by buying the part instead of making it?

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