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X Company currently buys a part from a supplier for $12.02 per unit but is...

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Accounting

X Company currently buys a part from a supplier for $12.02 per unit but is considering making the part itself next year. This year, they purchased 3,300 units of this part; next year, they will need 3,600 units. Estimated costs to make the part next year are:
Per-Unit Total
Direct materials $2.70 $8,910
Direct labor 3.91 12,903
Variable overhead 2.50 8,250
Fixed overhead 3.00 9,900
Total $12.11 $39,963
Of the estimated fixed overhead, $5,742 would be additional fixed overhead costs; the remainder would be common costs allocated to the part. X Company currently receives $2,900 a year by renting unused factory space, but it will have to use this space to make the part.
If X Company makes the part instead of continuing to buy it, it will save
A:$1,037 B $1,379 C:$1,834 D:$2,439 E:$3,244 F:$4,315

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