X Company is considering buying a part next year that they currently make. A company has offered to supply it for $13.66 per unit. This year's production costs for 3,100 units were as follows:

		Per-Unit	Total
Direct materials		$3.85	$11,935
Direct labor		4.67	14,477
Total overhead		8.40	26,040
Total costs		$16.92	$52,452

$17,980 of total overhead is fixed. If X Company chooses to buy the part, it will avoid fixed costs of $11,507.

1. If X Company buys the part next year instead of making it, and production is expected to remain at 3,100 units, it will save

A: $3,633

B: $4,251

C: $4,973

D: $5,819

E: $6,808

F: $7,966

Tries 0/99

2. If X Company buys the part next year instead of making it, and production next year is expected to be 3,500 units, it will save

A: $2,617

B: $3,795

C: $5,503

D: $7,979

E: $11,569

F: $16,776