X Company is considering buying a part next year that it currently makes. The budgeted cost function to produce the part is $10.07X + $9,600, where X is the number of units produced. A company has offered to supply this part to X Company for $12.51 per unit. If X Company chooses to buy the part, it will still incur fixed costs of $4,320, but it will be able to sell some of the equipment that it used to make the part for $2,800. Last year, 3,200 units of the part were produced; next year, 3,500 units will be needed.

1. If X Company makes the part next year instead of buying it, it will save

A: $393

B: $460

C: $538

D: $630

E: $737

F: $862

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2. At what production level would X Company be indifferent between making and buying the part next year?