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X Company is considering buying a part next year that it currently makes. The budgeted...

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Accounting

X Company is considering buying a part next year that it currently makes. The budgeted cost function to produce the part is $9.15X + $9,000, where X is the number of units produced. A company has offered to supply this part to X Comany it for $11.73 per unit. If X Company chooses to buy the part, it will avoid fixed costs of $3,600, and it will be able to lease the resources that will become available from not making the part for $2,200.

1. If X Company makes the part next year instead of buying it, and production is expected to remain at 3,000 units, it will save

A: $303 B: $439 C: $636 D: $923 E: $1,338 F: $1,940
Tries 0/99

2. If X Company makes the part next year instead of buying it, and production next year is expected to be 3,400 units, it will save

A: $2,328 B: $2,630 C: $2,972 D: $3,358 E: $3,795 F: $4,288

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