Golfers, Inc. (GI) manufactures golf-related equipment including golf balls. This years expected production of golf balls is 100,000 packs (each consisting of four golf balls). Cost data are as follows:

	Per Pack		100,000 Packs
Product costs directly traceable to balls:
Direct materials	$	2.50	$	250,000
Direct labour		1.20		120,000
Variable manufacturing overhead		0.15		15,000
Fixed manufacturing overhead				60,000
General allocated overhead				34,000
			$	479,000

The full cost of one pack of golf balls is $4.79. GI has received an offer from an outside supplier to supply any desired quantity of balls at a price of $5.85 per pack of four golf balls. The cost accounting department has provided the following information:

1. The direct fixed manufacturing overhead is the cost of leasing the machine that stamps out the balls. The machine can produce a maximum of 500,000 balls per year. If the balls are bought, the machine will no longer be needed.
2. No other costs will be affected.

Required:

1. Prepare an analysis showing whether GI would be better off making or buying the balls at a projected volume of 100,000 packs (400,000 golf balls). (Round "Per Unit" answers to 2 decimal places.)

	per unit	make	buy	difference
purchase
Direct Material
Direct Labour
varaible manufacturing overhead
fixed manuacturing overhead
common cost allocated to product line total cost

2-a. At what volume would GI be indifferent between making and buying? (Do not round intermediate calculations and round your final answer to nearest whole number.)

indifference point

________________?

packs

2-b. What does the indifference point indicate? (Do not round intermediate calculations and round your final answers to nearest whole number.)

it will cost more to	buy/make?	if the quality exceeds	______________	packs
it will cost more to	buy/make	if the quality exceed	--------------	packs