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A firm is evaluating the alternative of manufacturing a part that is currently being outsourced from a supplier. The relevant information is provided below:

For in-house manufacturing:

Annual fixed cost = $85,000
Variable cost per part = $130
For purchasing from supplier:

Purchase price per part = $140
If demand is forecast to be 2,500 parts, should the firm make the part in-house or purchase it from a supplier? Round your answer to the nearest whole number.

Break-Even Quantity:
parts

The best decision is to
-Select-
.

The marketing department forecasts that the upcoming year’s demand will be 2,500 parts. A new supplier offers to make the parts for $138 each. Should the company accept the offer? Round your answer to the nearest whole number.

New Break-Even Quantity:
parts

The best decision is to
-Select-
.

What is the maximum

Sagot :

Hey! Here's the answer.

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