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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 $10.11X + $19,200, where X is the number of units produced. A company has offered to supply this part to X Comany it for $12.77 per unit. If X Company chooses to buy the part, it will avoid fixed costs of $9,600, and it will be able to lease the resources that will become available from not making the part for $2,500.

1. If X Company buys the part next year instead of making it, and production is expected to remain at 3,200 units, it will save

A: $1,637 B: $1,915 C: $2,240 D: $2,621 E: $3,067 F: $3,588
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2. If X Company buys the part next year instead of making it, and production next year is expected to be 3,600 units, it will save

A: $1,347 B: $1,576 C: $1,844 D: $2,157 E: $2,524 F: $2,953

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