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A company is trying to decide whether to buy a product it uses or to produce the product itself. It expects to need 50,000 units
A company is trying to decide whether to buy a product it uses or to produce the product itself. It expects to need 50,000 units per year and has collected the following cost information for three options:
Buy Produce Produce
Product Manually Automated
Fixed cost $150,000 $200,000
Variable cost $20.00 $18.00 $15.00
At what volume would the company be indifferent to producing this product manually or by automated production?
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