Answer the questions below regarding a decision on whether to outsource the production of units where Company A does have full capacity utilization currently. Its current budget sales are $300,000,000 and operating profit is $75,000,000. The potential outsource supplier, Company B, has capacity to produce 250,000 units annually for Company A. Company A's Board thinks it will be less costly to outsource. The Board believes the internal cost is $300 per unit while Company B's cost is $280 all-in. So, outsourcing has to be less costly to Company A per the Board.

280