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X Company is considering buying a part next year that they currently make. This year's production costs for 3,000 units were as follows: Direct materials
X Company is considering buying a part next year that they currently make. This year's production costs for 3,000 units were as follows: Direct materials Direct labor Per-Unit $3.92 4.12 3.80 3.10 $14.94 Total $11,760 12,360 11,400 9,300 $44,820 Variable overhead Fixed overhead Total A company has offered to supply this part to X Company for $15.12 per unit. If X Company accepts the offer, it will still incur fixed costs of $4,278, but it will be able to lease the resources that will become available from not making the part for $2,100. At what production level would X Company be indifferent between making and buying the part next year? A: 712 OB: 1,033 C: 1,497 OD: 2,171 OE: 3,148 OF: 4,565
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