mpany be indifferent between making and buying the part in 2020 DO 2,387 2. AO...
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mpany be indifferent between making and buying the part in 2020 DO 2,387 2. AO 1,490 1,743 CO 2,040 2,792 Questions 3 and 4 refer to the following information: FO 3,267 X Company is considering buying a part in 2020 that it has been making for the past several years. A company has offered cO supply this part for $16.90 per unit. Budgeted production in 2020 is 52,000 units, and budgeted per-unit production costs are: Materials Direct labor [all variable Total overhead Total $6.00 5.90 4.30 $16.20 $52,000 of X Company's total overhead costs are fixed; $34,320 of the $52,000 are unavoidable even if it buys the part. Also, if X Company buys the part, it can rent the equipment that was used to make the part to another company for $70,000. 8 pt 3. If X Company continues to make the part instead of buying it, it will save FO $2,197 EO $1,758 DO $1,406 CO $1,125 BO $900 3. AO $720 8 pt 4. At what production level would X company be indifferent between making and buying the part? DO 68,597 FO 121,341 EO 91,234 51,576 BO 38,779 AO 29,157 4
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