Questions 3 and 4 refer to the following information: X Company is considering buying a...
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Questions 3 and 4 refer to the following information: X Company is considering buying a part in 2020 that it has been making for the past several years. A company has offered to supply this part for $16.89 per unit. Budgeted production in 2020 is 56,000 units, and budgeted per-unit production costs are: Materials $6.30 Direct labor all variable] 5.50 Total overhead Total $16.70 4.90 $84,000 of X Company's total overhead costs are fixed; $51,240 of the $84,000 are unavoidable even if it buys the part. Also, if X Company buys the part, it can rent the equipment that was used to make the part to another company for $80,000. 8 pt 3. If X Company buys the part instead of making it, it will save 3. AO $4,354 BO $5,791 CO 87,702 DO 510,244 EO $13,624 FO $18,120 8 pt 4. At what production level would X company be indifferent between making and buying the part? 4. AO 41,659 BO 48,741 CO 57,027 DO 66,722 EO 78,065 FO 91,336
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