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Soccer Inc manufactures soccer balls. This year, expected production is 20,000 balls. Cost data is below: Soccer Inc has the opportunity to purchase the balls
Soccer Inc manufactures soccer balls. This year, expected production is 20,000 balls. Cost data is below: Soccer Inc has the opportunity to purchase the balls from an external supplier instead of producing them internally. The cost to purchase externally from the supplier would be $9.20 per ball. If Soccer Inc was to purchase instead of produce, the machine used to manufacture (the fixed manufacturing overhead) would not need to be used and could be sold. No other costs are affected 9.1 Prepare an analysis to calculate if Soccer Inc should produce the balls or purchase them from the suppli if 20 , 000 balls are sold annually. 9.2 What would the break even point be where Soccer Inc would be indifferent to producing the balls or purchasing them from the supplier
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