X Corp. bought a part for $12.62 per unit. As X Corp. is considering to produce the part instead. The production line would cost $375631 per year in fixed costs. Running the line would consume $2.55 for materials and $1.19 for labor to make each unit.

X Corp. pays $5000 per year to ship and inspect the parts bought from another corp. If the part is made by its own, the cost could be avoid

For the coming year, X Corp expects to need 36878 of the parts.

1. What is the differential profit of insourcing production of the part?

What is the differential profit of insourcing production of the part?

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