Question: Given the following data for a make or buy decision: Alternative Fixed Cost Variable Cost Buy $0 per year $12 per unit Make $100,000 per

Given the following data for a make or buy decision:

Alternative Fixed Cost Variable Cost
Buy $0 per year $12 per unit
Make $100,000 per year $8 per unit

Based solely on the cost, for what quantity (units per year) would the firm be indifferent between buying or making (i.e., same cost for buying or making)?

  • A. 15,000 units
  • B. 20,000 units
  • C. 25,000 units
  • D. 60,000 units
  • E. None of the above

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