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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 $25.47 per unit. This year, production was 14,500 units; next year, production is expected to be 16,900 units. Total production costs for the part this year were: Materials Direct labor Variable overhead Fixed overhead Total $153,990 119,190 88,885 36,250 $398,315 $25,738 of X Company's fixed overhead cannot be avoided even 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 $2,750. X Company is uncertain about its 16,900 unit production estimate for next year. At what level of production would X Company be indifferent between making and buying the part next year? C: 35,278 D: 46,920 E: 62,404 F: 82,997 A: 19,944 B: 26,525 Submit Answer Tries 0/99
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