Problem 2 Break even problem: Bart Simpson drives his own car on company business. He is reimbursed 450/mile. Bart estimates that his fixed costs such as taxes, insurance etc. are $2500/year. The variable costs such as gas and maintenance are around 15 c/mile. How many miles should be drive to break even? Problem 3 A manager is trying to decide whether to purchase a certain part or to have it produced internally Internal production could use either of two processes: One would entaila variable cost of $15 per unit and an annual fixed cost of $300,000; the other would entail variable cost of $10 per unit and an annual fixed cost of $350,000 . Three vendors are willing to provide the part. - Vendor A has a price of $30 per unit for any volume up to 30,000 units. 1 Vendor B has a price of $35 per unit for demand of 5,000 units or less, and $25 per unit for larger quantities Vendor C has a price of $35 per unit for the first 5,000 units, and $20 per unit for additional units. If the manger anticipates an annual volume of 15,000 units, which alternative would be best from a cost standpoint? Does it change if the required quantity is 25,000 units? What is the point of indifference for internal production