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Hamiton Containers manufactures a variefy of boxes used for packaging. Sales of its Model A20 box have increased significantly to a total of 480,000 A20

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Hamiton Containers manufactures a variefy of boxes used for packaging. Sales of its Model A20 box have increased significantly to a total of 480,000 A20 boxes. Hamillon has enough existing production capacity to make al of the boxes in needs. The variable cost of making each A20 box is $0.78. By outsourcing the manutacture of these Azo boxes, Hamilion can reduce its current fxed costs by $72,000. There is no aliernative use for the factory space freed up through outsouroing, so it will just remain idle. What is the maximum Hamilton will pay per Modol A20 box to outsource production of this box? Begin by identifying the basic formula that is used to determine the indifferent outsourcing cost per unit. Using the basic formula you determined above solve for the indifferent outsourcing cost per unit. The maximum Hampton will pay to outsource production of its A20 boxes is Hampton would be indifferent between outsourcing and making the A20 boxes if the outsourcing price was per A20 box. Therefore, Hampton will only be willing to pay per A20 box if outsourcing

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