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X Company is considering buying a part next year that they currently make. This year's production costs for 3,400 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 3,400 units were as follows:

Per-Unit Total
Direct materials $2.40 $8,160
Direct labor 3.54 12,036
Variable overhead 3.50 11,900
Fixed overhead 4.00 13,600
Total $13.44 $45,696

A company has offered to supply this part to X Company for $12.89 per unit. If X Company accepts the offer, it will still incur fixed costs of $6,256, 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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