You are given the following information COSTS_______________MAKE OPTION___________BUY OPTION Fixed Cost..........................$25,000...............................$3,000 Variable Cost...................................$8...................................$12 a. Find the break-even
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COSTS_______________MAKE OPTION___________BUY OPTION
Fixed Cost..........................$25,000...............................$3,000
Variable Cost...................................$8...................................$12
a. Find the break-even quantity and the total cost at the break-even point. b. If the requirement is 4,500 units, is it more cost-effective for the firm to buy or make the components? What is the cost savings for choosing the cheaper option?
c. If the requirement is 6,000 units, is it more cost-effective for the firm to buy or make the components? What is the cost savings for choosing the cheaper option?
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Calculate the total cost for both options at the breakeven point Hence the total cost for both ...View the full answer
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Related Book For 
Principles of Supply Chain Management A Balanced Approach
ISBN: 978-1337406499
5th edition
Authors: Joel D. Wisner, Keah Choon Tan, G. Keong Leong
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