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X Company is considering buying a part next year that they currently make. This year's production costs for 3,500 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 3,500 units were as follows: Per-Unit Total $3.31 $11,585 3.37 11,795 Direct materials Direct labor Variable overhead Fixed overhead Total 3.60 12,600 3.00 10,500 $13.28 $46,480 A company has offered to supply this part to X Company for $13.53 per unit. If X Company accepts the offer, it will still incur fixed costs of $5,670, but it will be able to lease the resources that will become available from not making the part for $2,900. At what production level would X Company be indifferent between making and buying the part next year? A: 1,648 B: 1,863C: 2,105 D: 2,378E: 2,688F: 3,037
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