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7- A part is to be used in the assembly of a product. Alternative 1 is to manufacture it in-house and alternative 2 is to

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7- A part is to be used in the assembly of a product. Alternative 1 is to manufacture it in-house and alternative 2 is to purchase from outside, Determine the break-even quantity per year between the two alternatives using the data gven in the table and i=10%. [Note: You may use TC=FC,+v;Q and TC1=TC2 per year] Alternative 1: A machine will be needed for production. Initial cost of the Manufacture machine will be P=$72,000 and salvage value will be F=$8000 the Part dollars after 6 years of life. The variable production cost will be V1=$1.6 per unit. Alternative 2: Purchase the The part will be purchased at a cost of v2=$6 per unit. part from Outside a) 4568 Units b) 3522 Units 1364 Units d) @ 1500 Units e) 12000 Units Leave blank

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