X Company is considering buying a part next year that it has been making for the past
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Question:
X Company is considering buying a part next year that it has been making for the past several years. A company has offered to supply this part for $17.75 per unit. Budgeted production next year is 57,000 units, and budgeted production costs per-unit are:
Materials$7.00
Direct labor5.70
Total overhead4.50
Total$17.20
$57,000 of X Company's total overhead costs are fixed; $37,620 are unavoidable even if it buys the part. If X Company buys the part, there is nothing it can do with the resources that will become idle.
If X Company continues to make the part instead of buying it next year, it will save
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