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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 $2.71 $9,485
Direct labor 3.10 10,850
Variable overhead 3.20 11,200
Fixed overhead 5.00 17,500
Total $14.01 $49,035

A company has offered to supply this part to X Company for $12.39 per unit. If X Company accepts the offer, it will still incur fixed costs of $8,575, but it will be able to lease the resources that will become available from not making the part for $2,000. At what production level would X Company be indifferent between making and buying the part next year?

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