Question $6$

Scenario $12\mathrm{.}1$

You currently make a part on old equipment at a cost of $$50,000$ per year and a variable cost

of $$20/$ unit. You have found an outside supplier who will make the part for $$15/$ unit if

you will pay their annual fixed costs of $$200,\frac{000}{?}$ year. The following table summarizes the

details of this make versus buy decision.

Use Scenario $12\mathrm{.}1$ to answer the question. For what range of output would you prefer to

make?

$35,001-40,000$ units per year

$40,001$ or more units per year

$0-30,000$ units per year

$30,001$ to $35,000$ units per year