X Company no longer has the space necessary to produce all of its parts. A...
90.2K
Verified Solution
Link Copied!
Question
Accounting
X Company no longer has the space necessary to produce all of its parts. A company has offered to supply one of X Company's parts for $25.82 per unit. This year, production was 11,000 units; next year, production is expected to be 13,850 units. Total production costs for the part this year were:
| Materials | $114,290 |
| Direct labor | 98,560 |
| Variable overhead | 65,340 |
| Fixed overhead | 25,300 |
| Total | $303,490 |
$6,325 of X Company's fixed overhead can be avoided if it buys the part. In addition, if X Company buys the part, it will be able to rent some equipment that will no longer be needed, to a company for $2,500.
X Company is uncertain about its 13,850 unit production estimate for next year. At what level of production would X Company be indifferent between making and buying the part next year?
| Tries 0/5 |
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
- Unlimited Question Access with detailed Answers
- Zin AI - 3 Million Words
- 10 Dall-E 3 Images
- 20 Plot Generations
- Conversation with Dialogue Memory
- No Ads, Ever!
- Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Other questions asked by students
StudyZin's Question Purchase
1 Answer
$0.99
(Save $1 )
One time Pay
- No Ads
- Answer to 1 Question
- Get free Zin AI - 50 Thousand Words per Month
Unlimited
$4.99*
(Save $5 )
Billed Monthly
- No Ads
- Answers to Unlimited Questions
- Get free Zin AI - 3 Million Words per Month
*First month only
Free
$0
- Get this answer for free!
- Sign up now to unlock the answer instantly
You can see the logs in the Dashboard.