Question: A manufacturing company has always purchase a certain component part from a supplier for $60 per part. Recently, improvements in operations and reduced product demand

A manufacturing company has always purchase a certain component part from a supplier for $60 per part. Recently, improvements in operations and reduced product demand have cleared up some capacity in Alex's own plan for producing component parts. The particular part in question could be produced at $50 per part, with an annual fixed investment of $35,000. Currently, the company needs 350 of these parts per year. Should the company make or buy the component part?

1) Compute the break even volume

2) Should the company make or buy the component part?

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