Question: A high technology electronics firm needs a special microprocessor for use in a microcomputer it manufactures. Three alternative have been identified for satisfying its needs.

A high technology electronics firm needs a special microprocessor for use in a microcomputer it manufactures. Three alternative have been identified for satisfying its needs. It can purchase the microprocessors from a supplier at a cost of $10 each The firm also can purchase one of two pieces of automated equipment and manufacture the microprocessors. One equipment costs $80,000 and would have variable costs per microprocessor of $8. A more highly automated piece of equipment costs $120,000 and would result in variable costs of $5 per unit. Determine the minimum cost alternative for different ranges of output.

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