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Part B please XYZ company currently produces 20,000 units of component A. Another company has offered O sell the component to XYZ for $20 each.
Part B please XYZ company currently produces 20,000 units of component A. Another company has offered O sell the component to XYZ for $20 each. XYZ budgeted costs for making the 20,000 units of the component are: Of the $9/unit fixed overhead, $2 per unit is traceable to the component and would go away if the product were purchased. The other $7 per unit would continue regardless of whether the product were manufactured by XYZ or purchased elsewhere. A. At the 20.000 unit volume should XYZ buy from the outside supplier? What is the actual cost to make each unit? B. Would your answer change if they only needed 5,000 units? Why? Is the cost to manufacture a unit higher at the lower volume? If so, how much does it cost to make a unit at the lower volume
Part B please
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