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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 3,200 units were: Materials $3.50 3.89
X Company is considering buying a part next year that they currently make. This year's per-unit production costs for 3,200 units were: Materials $3.50 3.89 3.60 Direct labor jall variable Variable overhead Fixed overhead Total production costs $14.99 A company has offered to supply this part for $13.31 per unit. If X Company buys the part, $6,656 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 $2,400. Production next year is also expected to be 3,200 units 8 pt2. If X Company buys the part instead of making it, it will save 2 AO S1,632 BO $2,366 CO $3,431 DO $4,975 EO 7,214 FO 810,461 8 pts. At what production level would X Company be indiferent between making and buying the part? 3. AO 2,394 BO 2,705 CO 3,057 DO 3,454 EO 3,003 FO 4,411
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