Use the following information to answer the questions below. You currently make a part for old...

 

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Use the following information to answer the questions below. You currently make a part for old equipment at a cost of $20 / unit. The annual fixed cost for this equipment is $50,000. You have found an outside supplier who will make the part for $15 / unit if you will pay their annual fixed costs of $200,000 / year (see table). ALTERNATIVE Buy Make FIXED COST $200,000 per year $50,000 per year VARIABLE COST $15 per unit $20 per unit Refer to the instruction above. What is the break even quantity between buying and making? Use the following information to answer the questions below. You currently make a part for old equipment at a cost of $20 / unit. The annual fixed cost for this equipment is $50,000. You have found an outside supplier who will make the part for $15 / unit if you will pay their annual fixed costs of $200,000 / year (see table). ALTERNATIVE Buy Make FIXED COST $200,000 per year $50,000 per year VARIABLE COST $15 per unit $20 per unit Refer to the instruction above. What is the break even quantity between buying and making?

Answer rating: 100% (QA)

To determine the breakeven quantity between buying and making the part we need to find the point whe... View the full answer