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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   
Direct materials $3.41     $11,935  
Direct labor 4.65     16,275  
Variable overhead 2.50     8,750  
Fixed overhead 6.00     21,000  
Total $16.56    $57,960


A company has offered to supply this part to X Company for $13.71 per unit. If X Company accepts the offer, it will still incur fixed costs of $10,290, but it will be able to lease the resources that will become available from not making the part for $2,800. At what production level would X Company be indifferent between making and buying the part next year?

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