Industrial Products, Inc. has two alternatives for manufacturing 12,000 industrial 100-horse power electric motors per year. If

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Industrial Products, Inc. has two alternatives for manufacturing 12,000 industrial 100-horse power electric motors per year. If done in-house, fixed cost would be $2,100,000 with variable cost at $6,800 per unit. Alternative two is to outsource for a total cost of $7,300 per unit.  The relevant formulas can be found in Supplement C: Break-Even Analysis

a. What is the break-even quantity?

b. Should the firm make-in-house or outsource?

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Operations And Supply Chain Management

ISBN: 9780357131695

2nd Edition

Authors: David A. Collier, James R. Evans

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