Bene Petit is currently paying employees to deliver the meal boxes to customers doorsteps using a small fleet of delivery trucks. As the business expands, Taylor is trying to decide whether she should outsource to a private delivery company such as FedEx or UPS. The following additional details are available:

Variable delivery expenses for fuel and driver wages are $2 per customer order.

Fixed delivery expenses for insurance and maintenance on delivery trucks are currently $12,000 per year.

To expand delivery capacity beyond 7,500 deliveries per year, Bene Petit would need to invest in additional delivery trucks, which would increase fixed delivery expenses to $30,000 per year. This would provide the capacity to make up to 15,000 deliveries per year.

The contract rate for third party logistics providers such as UPS and FedEx is $5 per delivery.

Use the Tableau dashboard below to answer the questions.

a)

At the current volume of 5,000 meals per year, what are the incremental savings from insourcing or outsourcing?

b)

If Bene Petit expects demand to stabilize at about 8,000 meals per year, what will the incremental savings from insourcing or outsourcing be?

c)

If Bene Petit expects demand to increase beyond 8,000 meals per year, at what point will they be indifferent toward insourcing versus outsourcing?

d)

If Bene Petit expects to sell 13,000 meals per year, what will the incremental savings from insourcing or outsourcing be?

[The following information applies to the questions displayed below.] These questions relate to the Integrated Analytics Case: Bene Petit. Select the appropriate eBook link to open the Case Overview, Case Background, and Part 3: Managerial Decision Making. The following table summarizes the operating results for Bene Petit's first year of operations: Additional information about selling prices, variable costs, and fixed costs is summarized below: - The average sales price for customer meals is $5 per serving. - The average direct materials (ingredients) cost of customer meals is $1 per serving. - Direct labor costs average $0.75 per customer meal. - Variable manufacturing overhead costs are applied at a rate equal to 60% of direct labor. - The delivery expense for customer meals is $2 per customer order. - The incremental cost of producing the donated meals is $1.25 per meal. - The delivery expense for donated meals is $125 per delivery to community partners. - The following fixed costs are allocated to customer meals based on total sales revenue: - Fixed manufacturing overhead costs are $75,000 per year. - Fixed selling expenses are $29,000 per year. - Fixed administrative expenses are $40,000 per year