The parameter values represent a decision for which fixed costs are $$250,000.$

The image shows a graph of the total cost of in$-$house production and the total cost of outsourcing. The fixed costs of in$-$house production are $$250,000,$ and the variable cost per unit is $$20.$ The fixed costs of outsourcing are $$0,$ and the variable cost per unit is $$35.$

The break$-$even point is the point at which the two lines intersect. At this point, the total cost of in$-$house production is equal to the total cost of outsourcing. The break$-$even point in this case is $16,670$ units.

For quantities above the break$-$even point, in$-$house production is less expensive. For quantities below the break$-$even point, outsourcing is less expensive.

The parameter values represent a decision for which fixed costs are $$250,000.$ This means that the decision$-$maker is considering whether to produce in$-$house or outsource. If the decision$-$maker believes that they will produce more than $16,670$ units, then they should choose to produce in$-$house. If the decision$-$maker believes that they will produce fewer than $16,670$ units, then they should choose to outsource.Which of the following is least accurate for the case illustrated?

a$.$ An increase in the in$-$house fixed costs will increase the break$-$even point.

b$.$ A decrease in the out$-$sourcing unit cost will increase the break$-$even point.

c$.$ Production quantities smaller than the break$-$even point will result in a net loss.

d$.$ A decrease in the in$-$house unit production costs will decrease the break$-$even point.

Suppose your in$-$house fixed costs are $$200,000,$ in$-$house unit production cost is $$10,$ and the outsourcing unit cost is $$30.$ What is the break$-$even point?

a$.5,000$

b$.10,000$

c$.20,000$

d$.30,000$

Select$-v$

$3.$ Suppose your in$-$house fixed costs are $$200,000,$ in$-$house unit production cost is $$10,$ and the outsourcing unit cost is $$30.$ If both the in$-$house and out$-$source costs per unit increase by $$5,$ what happens to the break$-$even point?

a$.$ Decreases to $8,000$

b$.$ Increases to $13,333$

c$.$ Stays the same at $10,000$

d$.$ Decreases to $5,000$