Given the following data, determine the total annual cost of making with each of process A and B and of buying. Estimated demand is $9,500$ units a year.

Make

Process A Process B Buy

Variable cost per unit $ $47$ $ $50$ $ $49$

Annual fixed cost $ $40,000$ $ $33,000$

Transportation cost per unit $ $4$

The operations manager has said that it would be possible to achieve a $10$ percent reduction in the fixed cost of Process B and a $10$ percent reduction in B$$s variable cost per unit. Would that be enough to change your answer if the estimated annual cost to achieve those savings was $$6,000?$

multiple choice

Yes

No