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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
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 $26.98 per unit. This year, production was 13,000 units; next year, production is expected to be 16,500 units. Per-unit production costs for the part this year were: Materials $11.42 Direct 9.41 labor Variable 5.54 overhead Fixed 2.53 overhead Total $28.90 $24,668 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 another company for $3,250. If X Company buys the part instead of continuing to make it, it will save A: B: $863 $975 C: $1,102 OD: E: OF: $1,246 $1,408 $1,590 Submit Answer Tries 0/99
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