X Company currently buys a part from a supplier for $12.96 per unit but is...
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X Company currently buys a part from a supplier for $12.96 per unit but is considering making the part itself next year. This year, they purchased 3,300 units of this part; next year, they think they will need 3,800 units. Estimated costs to make the part are:
Per-Unit
Total
Direct materials
$3.57
$11,781
Direct labor
3.11
10,263
Variable overhead
3.90
12,870
Fixed overhead
4.70
15,510
Total
$15.28
$50,424
Of the estimated fixed overhead, $6,669 are common costs that would be allocated to the part; the rest would be additional fixed overhead costs. X Company currently rents unused factory space for $2,800; it will have to use this space to make the part. If X Company continues to buy the part instead of making it, it will save______.
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