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only need answers to the boxes, no need to show full work 2 Vista Company manufactures electronic equipment. In 2018, it purchased from an outside
only need answers to the boxes, no need to show full work
2 Vista Company manufactures electronic equipment. In 2018, it purchased from an outside supplier the special switches used in each of its products. The supplier charged Vista $2.0 per switch. As an alternative, Vista's CEO considered purchasing either machine A or machine so the company could manufacture its own switches. The CEO decided at the beginning of 2019 to purchase machine A, based on the following data: Machine A Machine B $220,000 Annual fixed cost (depreciation) Variable cost per switch $151,000 0.75 0.35 Required: 1. Assume that machine A has not yet been purchased. What is the annual volume that would make the company indifferent between the two decision alternatives (i.e., purchasing and then using machine A to make the switches versus purchasing the switches from the outside vendor)? 2. Assume that machine A has already been purchased. Is it preferable to use machine A to make the switches or to purchase the switches from the external supplier? 3. Assume that machine A has already been purchased. At what annual volume level should Vista consider replacing machine A with machine B? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Assume that machine A has not yet been purchased. What is the annual volume that would make the company indifferent between the two decision alternatives (i.e., purchasing and then using machine A to make the switches versus purchasing the switches from the outside vendor)? (Do not round intermediate calculations. Round your final answer up to the nearest whole number.) units/year Indifference point Required 1 Required 2 Required 2 Required 1 Required 3 Assume that machine A has already been purchased. Is it preferable to use machine A to make the switches or to purchase the switches from the external supplier? OUse machine A to make the switches. OPurchase the switches from the external supplier.Step by Step Solution
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