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 inhouse or outsource the packaging operation to a thirdparty warehouse company. In a given month, candles are sold. The following estimates have been made:
Inhouse
Outsource
Fixed cost per month
$
$
Variable cost per package
$
$
a What is the annual cost to package the candles inhouse?
b What is the annual cost to package with outsourced company?
c At what volume are they indifferent regarding the decision to package inhouse or outsource?
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