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X Company is considering buying a part next year that they currently make. This year's production costs for 3,200 units were as follows: Per-Unit Total
X Company is considering buying a part next year that they currently make. This year's production costs for 3,200 units were as follows: Per-Unit Total Direct materials $3.40 $10,880 4.47 14,304 Direct labor Variable overhead 4.40 14,080 Fixed overhead 3.50 11,200 Total $15.77 $50,464 A company has offered to supply this part to X Company for $15.37 per unit. If X Company accepts the offer, it will still incur fixed costs of $5,040, but it will be able to lease the resources that will become available from not making the part for $2,200. At what production level would X Company be indifferent between making and buying the part next year? A: 1,654 OB: 1,869 OC: 2,112 OD: 2,387 OE: 2,697 OF: 3,047
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