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 D Savings due to outsourcing per prod. volume Prod.Vol. 514,500.00 4.50 3 4 Fixed Cost $ 25,000.00 10000 $21.500 5 Material cost per unit $ 2.15 20000 $18,000 6 Labor cost per unit $ 2.00 30000 $14,500 7 40000 $11,000 8 Model 10000 $7,500 9 Production Volume 10000 60000 $4,000 10 70000 $500 11 Total Outsource Cost $ 135,000.00 B0000 ($3,000) 12 90000 156,500 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 Savings due to outsourcing per prod. volume and outsource cost per unit 4.20 5 4.35 $ $ 14,500.00 $ 4.50 $ 4.65 $ 4.30 30000 $24,500 $23,000 $21,500 $20,000 $18.500 20000 $24,000 $21,000 $18.000 $15,000 30000 $23,500 $19,000 $14,500 $10,000 $12,000 $5,500 40000 $23,000 $17,000 $11,000 $7,500 $5,000 (51,000) 50 $7,500 The outsourcing cost per unit is $4.50 The amounts in parantheses are negative (loss) Left column represent production volume Right column represent "Savings due to outsourcing 10000 $22,500 $15,000 60000 $22,000 $13,000 $4,000 ($5,000 ($14,000) 70000 $21,500 $11,000 B0000 $21,000 59,000 90000 $20,500 $7,000 $500 ($10.000) (530,500) ($3,000) 515.000) (527,000 (54.500) (520,000) 583,500 $20,000 $5,000 $10,000) 525,000) 540,000 The amounts in perontheses are negative foss 100000 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? O 10,000 to 20,000 O 20,001 to 30,000 O 30,001 to 40,000 O40,001 to 50,000 O 50,001 to 60,000 O 60,001 to 70,000 O 70,001 or more O It cannot be determined