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  1. business
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  3. x company currently makes a part and is considerin

X Company currently makes a part and is considering buying it next year from a...

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Accounting

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X Company currently makes a part and is considering buying it next year from a company that has offered to supply it for $17.53 per unit. This year, total costs to produce 65,000 units were: Direct materials Direct labor Variable overhead Fixed overhead $455,000 377,000 266,500 266,500 If X Company buys the part, $26,650 of the fixed overhead is avoidable. The resources that will become idle if they choose to buy the part can be used to increase production of another product, resulting in additional total contribution margin of $10,000. The marketing manager estimates that demand next year will increase to 69,750 units. If X Company continues to make the part instead of buying it, it will save A: $3,958 B: $4,473 OC: $5,054 OD: $5,711 OE: $6,454 OF: $7,292

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