1 As the CEO of Hakoopian clothing company you want to decide whether to manufacture a particular product or outsource its production. Your business analysis team develops a spreadsheet model and uses Excel's What-If analysis to analyze "Savings due to Outsourcing" based on different scenarios. The results below are provided to you as the CEO. 1 Parameters 2 Outsourcing Cost per unit 4.50 D Savings due to outsourcing per prod. volume Prod.Vol. $14,500.00 G Savings due to outsourcing per prod. volume and outsource cost per unit 5 14,500.00 $ 4.20 5 4.35 5 4.50 $ 4.65 $ 4.80 10000 $24,500 $23,000 $21,500 $20,000 $18,500 20000 $24,000 $21,000 $18,000 $15,000 $12,000 $10,000 $5,500 151,000 4 Fixed Cost $ 25,000.00 10000 $21,500 5 Material cost per unit $ 2.15 20000 $18,000 7 6 Labor cost per unit 8 Model 9 Production Volume 10 2.00 30000 $14,500 40000 $11,000 50000 $7,500 10000 60000 $4,000 70000 $500 11 Total Outsource Cost $ 135,000.00 80000 ($3,000) 12 90000 156500) 13 Total Fixed Cost $ 25,000.00 100000 ($10,000 14 Total Material Cost $ 64,500.00 15 Total Labor Cost $ 60,000.00 16 Total Cost $ 149,500.00 17 18 Savings due to outsourcing $ 14,500.00 19 The outsourcing cost per unit is $4.50 The amounts in parentheses are negotive () Left column represent production volume. Right column represent "Savings due to outsourcing 50 (57,500 155,000) 514,000 50000 $22,500 30000 $23,500 $19,000 $14,500 40000 $23,000 $17,000 $11,000 $15,000 60000 $22,000 513,000 $4,000 20000 $21.500 $11,000 $9,000 80000 $21,000 30000 $20,500 $7,000 $5,000 $7,500 100000 $500 $10,000) (20.500) (53,000) ($15,000) ($27,000 156,500) 520,000) 533,5000 $20,000 $5,000 $10,000 ($25,000) (540,000 The amounts in parentheses are negative less) The first (left-most) column represents the production volume The top row amounts represent "Outsourcing Cost per unit The amount in each cell represent "Savings due to outsourcing Assuming that the company to which you outsource charges you $4.80 per unit, based on the results above, which range for production volume contains the break-even point? 10,000 to 20,000 O 20,001 to 30,000 O 30,001 to 40,000 O40,001 to 50,000 50,001 to 60,000 O60,001 to 70,000 O70,001 or more It cannot be determined