X Company is considering buying a part next year that it currently makes. The budgeted cost function to produce the part is $10.66X + $13,600, where X is the number of units produced. A company has offered to supply this part to X Comany it for $13.41 per unit. If X Company chooses to buy the part, it will avoid fixed costs of $6,800, and it will be able to lease the resources that will become available from not making the part for $2,800.

1. If X Company buys the part next year instead of making it, and production is expected to remain at 3,400 units, it will save

A: $136

B: $153

C: $173

D: $196

E: $221

F: $250

2. If X Company makes the part next year instead of buying it, and production next year is expected to be 3,900 units, it will save

A: $1,125

B: $1,316

C: $1,540

D: $1,802

E: $2,108

F: $2,467