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X Company currently buys a part from a supplier for $11.38 per unit but is...

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Accounting

X Company currently buys a part from a supplier for $11.38 per unit but is considering making the part itself next year. This year, they purchased 3,000 units of this part; next year, they will need 3,300 units. Estimated costs to make the part next year are:

Per-Unit Total

Direct materials $2.33 $6,990

Direct labor 3.83 11,490

Variable overhead 2.50 7,500

Fixed overhead 4.50 13,500

Total $13.16 $39,480

Of the estimated fixed overhead, $7,965 would be additional fixed overhead costs; the remainder would be common costs allocated to the part. X Company currently receives $2,000 a year by renting unused factory space, but 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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