Question: A software development firm is contemplating outsourcing its customer support operations to a call center in another country. The current annual fixed cost of running

A software development firm is contemplating outsourcing its customer support
operations to a call center in another country. The current annual fixed cost of running
an in-house customer support center is $180,000, and the variable cost per customer
interaction is $5. The outsourcing contract would cost the firm $13 per customer
interaction. Calculate the breakeven point between outsourcing and doing it themselves.
If they need to produce 1 unit less than that number, is it cheaper to do it themselves or
outsource it?

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