Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. x company currently makes 2,600 units of a unique

X Company currently makes 2,600 units of a unique part for one of its finished...

50.1K

Verified Solution

Question

Accounting

X Company currently makes 2,600 units of a unique part for one of its finished products. Variable production costs for this part are $12.58 per unit; fixed costs associated with this part are $17,000 per year.

A company has offered to supply X Company with the part for a price of $15.00 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 $3,500 per year and per-unit inspection costs of $2.50. 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 $14,000 per year.

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

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

A particle with a charge of −2.80×10−8 C is moving with an instantaneous velocity of magnitude...

Physics
Q

You launch a projectile horizontally from a building 29.5 m above the ground at another building...

Physics
Q

Research the necessary steps involved to attain customer value. Apply these steps to your own perception...

General Management
Q

What distinguishes a protostome from a deuterostome?sequence or order of gut developmentwhether an animal has...

Biology
Q

16 A uniform circular disc of mass 40kg and radius 0 2 m is pivoted...

Physics
Q

Select the correct answer from each drop down menu A comic strip writer churns out...

Basic Math
Q

5 The Willis Tower in Chicago is 1453 feet tall and is located 1 mile...

Calculus
Q

The figure f x A d T TTTTTTTTTT

Calculus
Q

Find the general solution. y" - xy' + y = 0 with a particular solution...

Algebra
Q

Zira Company reports the following production budget for the next four months. Each finished unit...

Accounting
Q

Martinez Company has four operating divisions. During the first quarter of 2017, the company reported...

Accounting
Q

What information is commonly provided by a job-seeker on the application for employment form? a....

Accounting