X Company is considering buying a part next year that they currently make. A company...
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Accounting
X Company is considering buying a part next year that they currently make. A company has offered to supply this part for $17.67 per unit. This year's total production costs for 54,000 units were:
Materials
$361,800
Direct labor [all variable]
302,400
Total overhead
302,400
Total production costs
$966,600
Of the total overhead costs, $108,000 were fixed, and $77,760 of these fixed overhead costs were unavoidable. If X Company buys the part, the resources that were used for production can be rented out for $70,000. Production next year is expected to increase to 57,950 units. If X Company continues to make the part instead of buying it, it will save ____
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