A firm plans to begin production of a new small appliance. The manager must decide whether...

 

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A firm plans to begin production of a new small appliance. The manager must decide whether to purchase the motors for the appliance from a vendor for $7.00 each or to produce them in house. There are two in house options. Option 1 would have an annual fixed cost of $160000 and a variable cost of $5.60. Option 2 would have an annual fixed cost of $192000 and a variable cost of $3.50. Calculate the maximum quantity that would have the manager select purchasing the motors from the vendor. A firm plans to begin production of a new small appliance. The manager must decide whether to purchase the motors for the appliance from a vendor for $7.00 each or to produce them in house. There are two in house options. Option 1 would have an annual fixed cost of $160000 and a variable cost of $5.60. Option 2 would have an annual fixed cost of $192000 and a variable cost of $3.50. Calculate the maximum quantity that would have the manager select purchasing the motors from the vendor.

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Answer Solution i Let x be the maximum quantity for whi... View the full answer