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A firm plans to begin production of a new small appliance. The manager must decide whetherto purchase the motors for the appliance from a vendor
A firm plans to begin production of a new small appliance. The manager must decide whetherto purchase the motors for the appliance from a vendor at $7 each or to produce them in-house.Either of two processes could be used for in-house production; one would have an annual fixed costof $160,000 and a variable cost of $5 per unit, and the other would have an annual fixed cost of $190,000 and a variable cost of $4 per unit. Determine the range of annual volume for which eachof the alternatives would be best.
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