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Chip Co. (Business number #BN61513) is considering outsourcing the production of its chips. The cost to buy the chips is $81.40 per unit. The production
Chip Co. (Business number #BN61513) is considering outsourcing the production of its chips. The cost to buy the chips is $81.40 per unit. The production costs to make the chips involve direct materials per unit of $25.29, direct labour per unit of $30.32, and variable overhead per unit of $2.27. Total fixed overhead for the firm $700,000. Considering that $250,000 of fixed costs can be eliminated if the chips are outsourced, what is the production level, in units, that will make Chip Co. indifferent between outsourcing or keeping manufacturing in-house? Round your answer to the nearest whole unit. Enter your answer with no commas.
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