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Buttery Bags is a young brand that manufactures backpacks and messenger bags in Florida. Despite the company being only 5 years in the market, it
Buttery Bags is a young brand that manufactures backpacks and messenger bags in Florida. Despite the company being only 5 years in the market, it has already become one ofthe competitive businesses with a growing prot. However. after CDVID 19 the company's prot decreased dramatically compared to previous years. That is why the company decided to produce a unique product which will be demanding in a market and will bring higher prot. Buttery Bag's design team made a new bag that includes a builtin power charge. These bags can be used to recharge the majority of smartphones and computers. The bags have become popular among people who are constantly on the move and travel a lot. The retail price of the new bag will be $229. The product is expected to be very popular. The company has identied the following options to manufacture the new bags: . Option A: Buttery Bags outsources production of the new product to a third party at a cost of $180 per unit (including labor and materials}. There is negligible xed cost if the bag is produced by a third party. . Option 13: Buttery Bags makes the product in house, at $120 per unit [including labor and materials). The company has to acquire additional sewing machines at a cost of $60,000 to produce the neu-r product at its existing facility. . Option C: Buttery Bags refurbishes one of its storage facilities with entirely new technology. The company purchases numerically-controlled machines to manufacture the bags at $30 per unit {including labor and materials]. This option has a fixed cost of $220,000. :1} Determine the range of production volume which makes Option A the lowestcost option. b] Determine the range of production volume which makes Option B the lowestcost option. c} Determine the range of production volume which makes Option C the lowestcost option
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