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: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

6. Elway Electronics has debt with a market value of $350,000, preferred stock with a market...

Finance
Q

Q1. Using brand development and management strategies as well as communications and PR, create a brief...

Operations Management
Q

Again match the auditory structures listed on the left to their best fits for each...

Biology
Q

A family tree of sorts is called a pedigree The symbols used for a pedigree...

Biology
Q

A point object O is placed between two plane mirrors as shown in M 10mm...

Physics
Q

For the standard normal distribution the area within 3 standard deviations of the mean is...

Statistics
Q

0 Yaster Outfitters manufactures and sells extreme cold sleeping bags The table below shows the...

Statistics
Q

If f x sin x find f x Find f 3

Calculus
Q

Question 12

Accounting
Q

please answer correctly Ms. Shelly Spring is a 48-year-old widow....

Accounting
Q

The Cullumber Theater inc. was recently formed. It began operations in March 2025. The Cullumber...

Accounting
Q

Discuss the role of support materials and how can you visualize the support materials.

Accounting