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Ultimate Travel Company fabricates automobiles. Each auto includes one wiring harness, which is currently made in - house. Details of the harness fabrication are as

Ultimate Travel Company fabricates automobiles. Each auto includes one wiring harness, which is currently made in - house. Details of the harness fabrication are as follows:
Volume
800 units per month
Variable cost per unit
$7 per unit
Fixed costs
$15,000 per month
A factory in India has offered to supply Ultimate Travel with ready - made units for a cost of $10 each. Assume that Ultimate Travel's fixed costs are unavoidable, but the company could use the vacated production facilities to earn an additional $5,500 of profit per month. In order to maximize operating income, Ultimate Travel should outsource.
True
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