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X Company is considering buying a part next year that it currently makes. The budgeted...

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Accounting

X Company is considering buying a part next year that it currently makes. The budgeted cost function to produce the part is $10.49X + $12,400, where X is the number of units produced. A company has

offered to supply this part to X Comany it for $13.28 per unit. If X Company chooses to buy the part, it will still incur fixed costs of $7,440, but it will be able to lease the resources that will become available

from not making the part for $2,400.

1. If X Company makes the part next year instead of buying it, and production is expected to remain at 3,100 units, it will save

A: $1.009

B: $1.141

c- $1.289

D- $1.457

E: $1.646

F. $1.860

2. If X Company makes the part next year instead of buying it, and production next year is expected to be 3,600 units, it will save

A: $1.374

B: $1.718

c- $2.147

D: $2.684

E: $3.355

F: $4.194

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