X Company is considering buying a part next year that it currently makes. The budgeted cost function to produce the part is $9.15X + $9,000, where X is the number of units produced. A company has offered to supply this part to X Comany it for $11.73 per unit. If X Company chooses to buy the part, it will avoid fixed costs of $3,600, and it will be able to lease the resources that will become available from not making the part for $2,200.

1. If X Company makes the part next year instead of buying it, and production is expected to remain at 3,000 units, it will save

A: $303

B: $439

C: $636

D: $923

E: $1,338

F: $1,940

Tries 0/99

2. If X Company makes the part next year instead of buying it, and production next year is expected to be 3,400 units, it will save

A: $2,328

B: $2,630

C: $2,972

D: $3,358

E: $3,795

F: $4,288