X Company currently buys a part from a supplier for $13.72 per unit but is...
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X Company currently buys a part from a supplier for $13.72 per unit but is considering making the part itself next year. This year, they purchased 3,100 units of this part; next year, they think they will need 3,400 units. Estimated costs to make the part are:
| Per-Unit | Total | ||
| Direct materials | $2.96 | $9,176 | |
| Direct labor | 4.53 | 14,043 | |
| Variable overhead | 3.90 | 12,090 | |
| Fixed overhead | 3.40 | 10,540 | |
| Total | $14.79 | $45,849 | |
Of the estimated fixed overhead, $4,321 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 $2,900; it will have to use this space to make the part. If X Company continues to buy the part instead of making it, it will save......
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