Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. x company currently makes 2,500 units of a unique

X Company currently makes 2,500 units of a unique part for one of its finished...

50.1K

Verified Solution

Question

Accounting

X Company currently makes 2,500 units of a unique part for one of its finished products. Variable production costs for this part are $12.87 per unit; fixed costs associated with this part are $16,000 per year.

A company has offered to supply X Company with the part for a price of $15.30 per unit. For X Company, the bad news is that it will have to inspect the parts upon arrival, requiring rental of a special machine for $3,300 per year and per-unit inspection costs of $2.70. The good news is that if it buys the part, not only can it avoid all of the fixed costs associated with the production of the part, but it can use the released production facilities to generate $17,000 per year.

At what production level would X Company be indifferent between making the part and buying it?

A: 2,964 B: 3,705 C: 4,632 D: 5,789 E: 7,237 F: 9,046

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

why did some particles pass through the foil undeflected. why did some particles pass through the...

Chemistry
Q

TWO PARTS PROBLEM PART 1)  Statement of the Assignment: Please prepare a comprehensive list of financial ratios . Write a...

Finance
Q

Please, faster Please answer the following questions in \"Energy Efficiency Basics\" multiple choice: Which knowledge in the hands...

Electrical Engineering
Q

A group of 20 students were asked how many times they visit a certain website...

Basic Math
Q

Calculate dy dx for 3 x y 6 Vy 3 x O dy da dy...

Calculus
Q

Sheridan, Inc. has recently started the manufacture of Tri-Robo, a three-wheeled robot that can scan...

Accounting
Q

The stockholders' equity accounts of Bridgeport Corporation on January 1, 2022, were as follows. During...

Accounting
Q

The following statements are related to the concept of a cash-generating unit (CGU) for the...

Accounting
Q

Tommy's Tile Service is planning on purchasing new tile cleaning equipment that will improve its...

Accounting
Q

(Related to Checkpoint 9.2 and Checkpoint 9.3) (Bond valuation relationships) The 17-year, $1,000 par value...

Finance
Q

Required information Greenwood Company manufactures two products-14,000 units of Product Y and 6,000 units of...

Accounting
Q

A property owner donates a rectangular parcel of land to the humane society for a...

Finance