X Company is considering buying a part next year that they currently produce. A company has offered
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X Company is considering buying a part next year that they currently produce. A company has offered to supply this part for $16.65 per unit. This year’s total production costs for 57,000 units were:Materials$324,900Direct labor [all variable]273,600Total overhead319,200Of the total overhead costs, $68,400 were fixed, and $42,408 of these fixed overhead costs are unavoidable. If X Company buys the part, the resources that were used for production can be rented to another company for $80,000. Production next year is expected to increase to 60,700 units.If X Company continues to make the part instead of buying it, it will save….?
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