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  1. business
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  3. x company is considering buying a part next year t

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 $10.61X + $12,000, where X is the number of units produced. A company has offered to supply this part to X Comany it for $13.07 per unit. If X Company chooses to buy the part, it will still incur fixed costs of $6,000, but it will be able to lease the resources that will become available from not making the part for $2,600.

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

A: $519 B: $690 C: $917 D: $1,220 E: $1,623 F: $2,158

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

A: $133 B: $177 C: $236 D: $314 E: $417 F: $555

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