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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 $26.27 per unit. This year, production was 13,000 units; next year, production is expected to be 16,300 units. Per-unit production costs for the part this year were: Materials Direct labor Variable overhead Fixed overhead Total $10.18 9.00 6.50 2.74 $28.42 $28,852 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 $3,500. X Company is uncertain about its 16,300 unit production estimate for next year. At what level of production would X Company be indifferent between making and buying the part next year? A: 13,085 B: 17,403 C: 23,146 D: 30,784 OE: 40,943 F: 54,454 Submit Answer Tries 0/99 Send Feedback Communication Blocked
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