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X Company currently buys a part from a supplier for $13.86 per unit but is...

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Accounting

X Company currently buys a part from a supplier for $13.86 per unit but is considering making the part itself next year. This year, they purchased 3,400 units of this part; next year, they think they will need 3,800 units. Estimated costs to make the part are:

Per-Unit Total
Direct materials $3.37 $11,458
Direct labor 4.58 15,572
Variable overhead 3.60 12,240
Fixed overhead 3.70 12,580
Total $15.25 $51,850

Of the estimated fixed overhead, $6,038 are common costs that would be allocated to the part; the rest would be additional fixed overhead costs. X Company currently rents unused factory space for $2,100; it will have to use this space to make the part. If X Company makes the part instead of buying it, it will save?

(The answer is not 6672)

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