X Company currently buys a part from a supplier for $13.72 per unit but is...
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Accounting
X Company currently buys a part from a supplier for $13.72 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
$3.74
$12,342
Direct labor
4.88
16,104
Variable overhead
2.60
8,580
Fixed overhead
4.00
13,200
Total
$15.22
$50,226
Of the estimated fixed overhead, $6,468 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 $2,600; it will have to use this space to make the part. If X Company makes the part instead of buying it, it will save
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