Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. x company currently makes 2,500 units of a unique

X Company currently makes 2,500 units of a unique part for one of its finished...

70.2K

Verified Solution

Question

Accounting

X Company currently makes 2,500 units of a unique part for one of its finished products. Variable production costs for this part are $12.87 per unit; fixed costs associated with this part are $16,000 per year.

A company has offered to supply X Company with the part for a price of $15.30 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 $3,300 per year and per-unit inspection costs of $2.70. 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 $17,000 per year.

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

A: 2,964 B: 3,705 C: 4,632 D: 5,789 E: 7,237 F: 9,046

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

Statistics
1.2K views

distinguish between the exponential distribution and the poisson distribution

Medical Sciences
1.2K views

Detail how blood pressure is taken and provide normal blood pressure values. In your narrative, answer...

Accounting
1.2K views

Can Costing Accounting works be taken over by the book keeper in the accounting record process?...

Accounting
1.2K views

The complexity of the current business environment and regulatory environment has increased the demand for individuals...

Geometry
1.2K views

7 n 8 ft 6 ft A fast food restaurant stores its cooking oil container...

Basic Math
1.2K views

6 Side Find the missing side indicated if the line is tangent to the circ

Basic Math
1.2K views

A jar has two red, three blue, one white, and three yellow jelly beans. How...

Calculus
1.2K views

Find WX in rectangle WXYZ N W 7p 35 6p 28

Algebra
1.2K views

10 4x 10x x x 4

Accounting
1.2K views

Kimmel, Survey of Accounting, le with Job Order Costing Help I System Announcements Multiple Choice...

Accounting
1.2K views

You have decided to start saving money for your future. What is the future value...

Accounting
1.2K views

On January 1,2022, Crane Company had a balance of $372,500 of goodwill on its balance...