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Vista Company manufactures electronic equipment. It currently purchases from an outside supplier the special switches used in each of its products. The supplier charges Vista
Vista Company manufactures electronic equipment. It currently purchases from an outside supplier the special switches used in each of its products. The supplier charges Vista $6.50 per switch. Vista's CEO is considering purchasing either machine A or machine B so the company can manufacture its own switches. The projected data are as follows: Annual fixed cost Variable cost per switch Machine A Machine B $812,150 $1,112,775 0.95 2.11 Required: 1. For each machine, what is the minimum number of switches that Vista must make annually for total costs to equal outside purchase cost? (Do not round intermediate calculations.) Machine A Machine B Minimum number of switches 185,000 200,500 2. What volume level would produce the same total costs regardless of the machine purchased? (Round your answer up to the nearest whole number.) Volume level units 3. What is the most profitable alternative for producing 260,000 switches per year and what is the total cost of that alternative
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