Swifty Company is currently purchasing a component for $ 11 but is considering making the part internally. The plant engineer has suggested two alternatives. The first alternative would increase fixed costs by $ 12,300 per month and incur variable costs of $ 8 per part. The second alternative would increase fixed costs by $ 20,800 and incur variable costs of $ 6 per part.

What level of volume is necessary to justify making the part? (Round answers to 0 decimal places, e.g. 125.)

		Level of volume
First alternatives			units
Second alternatives			units

Over what relevant ranges of volume is each alternative optimal?

1.		For demand under units, purchase the part
2.		For demand between and units, adopt Alternative 1
3.		For demand over units, adopt Alternative 2

At a level of output of 4,175 units, which alternative is most profitable?

Choose your answer here Alternative 1/ Alternative 2