Company currently makes a part and is considering buying it next year from a company...
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Company currently makes a part and is considering buying it next year from a company that has offered to supply it for 18.90 per unit. This year, total costs to produce 67,000 units were Direct materials Direct labor Variable overhead Fixed overhead $522,600 402,000 274,700 321,600 If X Company buys the part, $286,224 of the fixed overhead is unavoidable. The resources that will become idle if they choose to buy the part can be used to increase production of another product, resulting in additional total contribution margin of $15,000. The marketing manager estimates that demand next year will increase to 71,200 units. If X Company continues to make the part instead of buying it, it will save HOA: $3,249B: $4,711 C: $6,831 D: $9,904 E: $14,361F: $20,824
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