Question: A candle maker needs to know whether to package the candles in - house or outsource the packaging operation to a third - party warehouse

A candle maker needs to know whether to package the candles in-house or outsource the packaging operation to a third-party warehouse company. In a given month, 10,000 candles are sold. The following estimates have been made:
In-house
Outsource
Fixed cost per month
$2,000
$0
Variable cost per package
$0.45
$.75
a. What is the annual cost to package the candles in-house?
b. What is the annual cost to package with outsourced company?
c. At what volume are they indifferent regarding the decision to package in-house or outsource?

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