Questions 1 and 2 refer to the following information: X Company is considering buying a...
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Questions 1 and 2 refer to the following information: X Company is considering buying a part next year that it currently makes. This year's production costs for 3,300 units were: Direct materials Direct labor Variable overhead Fixed overhead Total Per-Unit $2.39 4.85 4.10 5.40 Total $7,887 16,005 13,530 17,820 $55,242 $16.74 A company has offered to supply this part for $15.21 per unit. $8,732 of X Company's fixed overhead are allocated costs that will occur even if they buy the part. But if X Company buys the part, it can rent out the freed-up resources for $2,100. Production next year is expected to be 3,800 units. 1. If X Company continues to make the part instead of buying it, it will save Submit Answer Tries 0/3 2. At what production level would X Company be indifferent between making and buying the part? Submit Answer Tries 0/3
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