Intel Corporation evaluates a make-or-buy decision for semiconductor components. In April 2038, the company estimates the following costs for making the components in-house:

• Fixed Costs: $5,000,000
• Variable Costs: $200 per unit

An external supplier offers to provide the components at $250 per unit.

Requirements:

• Perform a cost analysis for making vs. buying the components.
• Calculate the breakeven point for making the components in-house.
• Analyze qualitative factors affecting the decision.
• Prepare a recommendation report for management.
• Discuss the strategic implications of the decision.