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X Company currently buys a part from a supplier for $12.96 per unit but is...

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Accounting

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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