MAKE VS. BUY (OUTSOURCE) Sophie's Boat Company produces 1,000 sailboats per year at her factory near a large lake. Although Sophie currently buys the sails for her sailboats (one set of sails per boat) at a price of $300 per set, she is considering making them in some factory space that she does not currently use. Sophie estimates that the variable cost of making the sails is $250 per set. If Sophie continues to buy the sails, she just found out that she can rent the currently unused factory space for $80,000 per year to a local business that sells various sailing accessories. Would Sophie's annual Net Operating Income increase or decrease if she decides to make the sails? By how much.

Answer rating: 100% (QA)

Sophies annual Net Operating Income would increase by 13... View the full answer