X Company is considering buying a part next year that they currently make. This year's...
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X Company is considering buying a part next year that they currently make. This year's production costs for 3,500 units were as follows: Per-Unit Total Direct $10,185 materials $2.91 4.73 16,555 Direct labor Variable overhead Fixed 2.70 9,450 overhead 4.00 14.000 Total $14.34 $50,190 A company has offered to supply this part to X Company for $13.60 per unit. If X Company accepts the offer, it will avoid fixed costs of $7,700, and it will be able to lease the resources that will become available from not making the part for $2,100. At what production level would X Company be indifferent between making and buying the part next year? A: 3,006 B: 3,758 C: 4,697 D: 5,871 E: 7,339 OF: 9,174
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