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X Company is considering buying a part next year that they currently make. This year's per-unit production costs for 3,300 units were: Materials $2.90 Direct

X Company is considering buying a part next year that they currently make. This year's per-unit production costs for 3,300 units were:

Materials $2.90
Direct labor [all variable] 3.06
Variable overhead 4.30
Fixed overhead 5.40
Total production costs $15.66

A company has offered to supply this part for $12.76 per unit. If X Company buys the part, $9,445 of the fixed overhead can be avoided. Also if X Company buys the part, it can use the freed-up resources to increase production of another product, resulting in additional contribution margin of $2,000. Production next year is also expected to be 3,300 units.

1) If X Company buys the part instead of making it, it will save _______

2) At what production level would X Company be indifferent between making and buying the part?

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