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LM Cases Ltd has the option to make or buy one of its component parts. The annual requirement is 6,500 units. A supplier is able
LM Cases Ltd has the option to make or buy one of its component parts. The annual requirement is 6,500 units. A supplier is able to supply the parts for $16 per piece. The firm estimates that it costs $4,500 to prepare the contract with the supplier. To make the part in-house, the firm must invest $28,500 in capital equipment and estimates that the parts cost $10 per piece IMPORTANT: Enter number as: 13000 (without comma). When calculating, make sure to round each calculation to the closest whole number and use that number in all your calculations! a) Should the firm make or buy? (Enter Make or Buy) b) What is the break-even quantity? c) What is the total cost at the break-even point? For question from d to e: Assume instead that the annual requirement is 4,500; calculate the total cost for both options and the cost savings for choosing the cheaper option. d) Should the firm make or buy at 4500 units? (Enter Make or buy e) Cost savings from choosing the cheaper optionx
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