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X Company is considering buying a part next year that they currently make. A company has offered to supply it for $14.32 per unit. This
X Company is considering buying a part next year that they currently make. A company has offered to supply it for $14.32 per unit. This year's production costs for 3,300 units were as follows: Direct materials Direct labor Total overhead Total costs Per-Unit $3.85 4.97 6.10 $14.92 Total $12,705 16,401 20,130 $49,236 $11,220 of total overhead is fixed. If X Company chooses to buy the part, it will still incur fixed costs of $4,825. 1. If X Company makes the part next year instead of buying it, and production is expected to remain at 3,300 units, it will save OA: $1,962 OB: $2,845 C: $4,125 D: $5,981 OE: $8,672 OF: $12,575 * Tries 0/99 2. If X Company makes the part next year instead of buying it, and production next year is expected to be 3,700 units, it will save OA: $2,432|OB: $2,748 OC: $3,105 OD: $3,508 OE: $3,965 OF: $4,480 * Tries 0/99
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