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X Company currently buys a part from a supplier for $13.32 per unit but is...

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Accounting

X Company currently buys a part from a supplier for $13.32 per unit but is considering making the part itself next year. This year, they purchased 3,400 units of this part; next year, they will need 3,800 units. Estimated costs to make the part next year are:

Per-Unit Total
Direct materials $2.98 $10,132
Direct labor 4.41 14,994
Variable overhead 3.10 10,540
Fixed overhead 4.90 16,660
Total $15.39 $52,326

Of the estimated fixed overhead, $8,330 would be additional fixed overhead costs; the remainder would be common costs allocated to the part. X Company currently receives $2,300 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: $97 B: $110 C: $124 D: $140 E: $158 F: $179

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