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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: Direct materials
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: Direct materials Direct labor Variable overhead Fixed overhead Total Per-Unit $3.16 4.72 2.80 Total $11,060 16,520 9,800 12,600 $49,980 3.60 $14.28 A company has offered to supply this part to X Company for $13.40 per unit. If X Company accepts the offer, it will still incur fixed costs of $6,174, but it will be able to lease the resources that will become available from not making the part for $2,700. Next year's expected production level is 3,900 units. 11. If X Company makes the part next year instead of buying it, it will save A: $925 B: $1,083C: $1,267 OD: $1,482 E: $1,734 OF: $2,029 Submit Answer Tries 0/99 12. At what production level would X Company be indifferent between making and buying the part next year? A: 2,451 B: 2,868 C: 3,355 D: 3,926 E: 4,593 OF: 5,374 Submit Answer Tries 0/99
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