X Company is considering buying a part next year that they currently make. A company has offered to supply it for $13.65 per unit. This year's production costs for 3,000 units were as follows:

		Per-Unit	Total
Direct materials		$3.65	$10,950
Direct labor		4.62	13,860
Total overhead		7.60	22,800
Total costs		$15.87	$47,610

$15,000 of total overhead is fixed. If X Company chooses to buy the part, it will avoid fixed costs of $8,550.

The following information is for Questions 1 and 2 X Company is considering buying a part next year that they currently make. A company has offered to supply it for $13.65 per unit. This year's production costs for 3,000 units were as follows: Direct materials Direct labor Total overhead Total costs Per-Unit $3.65 4.62 7.60 $15.87 Total $10,950 13,860 22,800 $47,610 $15,000 of total overhead is fixed. If X Company chooses to buy the part, it will avoid fixed costs of $8,550. 1. If X Company buys the part next year instead of making it, and production is expected to remain at 3,000 units, it will save A: $108|OB: $134 C: $168 OD: $210 OE: $263 OF: $328 Tries 0/99 2. If X Company makes the part next year instead of buying it, and production next year is expected to be 3,500 units, it will save C: $1,507| OD: $1,703 OE: $1,924 OF: $2,174|| OA: $1,180|OB: $1,333 A Tries 0/99