Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. x company currently makes 2,300 units of a unique

X Company currently makes 2,300 units of a unique part for one of its finished...

50.1K

Verified Solution

Question

Accounting

X Company currently makes 2,300 units of a unique part for one of its finished products. Variable production costs for this part are $13.58 per unit; fixed costs associated with this part are $17,000 per year.

A company has offered to supply X Company with the part for a price of $15.00 per unit. For X Company, the bad news is that it will have to inspect the parts upon arrival, requiring rental of a special machine

for $3,600 per year and per-unit inspection costs of $3.30. The good news is that if it buys the part, not only can it avoid all of the fixed costs associated with the production of the part, but it can use the

released production facilities to generate $14,000 per year.

At what production level would X Company be indifferent between making the part and buying it?

A: 3,151

B: 3,560

C: 4,023

D: 4,546

E: 5,137

F: 5.805

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Physics
1.2K views

Use the quantum particle wavefunctions for the kinetic energy levels in a one dimensional box to qualitatively...

Physics
1.2K views

3 In the shown figure the mutual inductance of two coils is M the coil...

Basic Math
1.2K views

Assume you intend to create a stratified sample of 250 from a population of 920...

Basic Math
1.2K views

What are the x-intercepts of the function f (x) = 2x + 7x-4?x=-1/2?x = 4x...

Statistics
1.2K views

8 Every year the value of a car decreases The following graph illustrates the depreciation...

Accounting
1.2K views

Suppose the U.S. government plans a new fiscal stimulus by cutting taxes by $10 billion....

Accounting
1.2K views

The Distance Plus partnership has the following capital balances at the beginning of the current...

Accounting
1.2K views

A differential equation may have? 1-No solutions. 2- All of the mentioned 3- Exactly...

Accounting
1.2K views

The following data were gathered to use in reconciling the bank account of Reddan Company:...

Accounting
1.2K views

Seri Wani Medical Centre (SWMC), a newly set-up hospital, leases an electronic digital scanning machine...

Accounting
1.2K views

Ursus, Incorporated, is considering a project that would have a five-year life and would require...

Accounting
1.2K views

Question 18 The experience curve reveals that O (A) repetition in production lowers costs O...