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X Company no longer has the space necessary to produce all of its parts. A company has offered to supply one of X Company's parts
X Company no longer has the space necessary to produce all of its parts. A company has offered to supply one of X Company's parts for $27.75 per unit. This year, production was 12,000 units; next year, production is expected to be 14,650 units. Total production costs for the part this year were: Materials $141,480 Direct labor 113,040 Variable overhead 72,000 Fixed overhead 40,680 Total $367,200 $6,509 of X Company's fixed overhead can be avoided if it buys the part. In addition, if X Company buys the part, it will be able to rent some equipment that will no longer be needed, to a company for $4,000. X Company is uncertain about its 14,650 unit production estimate for next year. At what level of production would X Company be indifferent between making and buying the part next year? OA: 4,676 OB: 6,219 Oc: 8,272 OD: 11,002 DE: 14,632 OF: 19,461
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