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XYZ Limited manufactures automobile transmissions. You are the Operations Manager and must make a decision whether to manufacture or to buy a special part. The

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XYZ Limited manufactures automobile transmissions. You are the Operations Manager and must make a decision whether to manufacture or to buy a special part. The details are as follows: ALTERNATIVE FIXED COST VARIABLE COST Make $50,000 per year $8 per unit Buy $20 per unit A) For what range of production should XYZ make the part and for what range of production should XYZ buy the part? B) Which alternative would you select for a quantity of 4,000 units per year? C) What would be your total costs for the preferred alternative, for 5,000 units per year? D) Draw a graph to represent the relationship between the costs for the two alternatives identified above (make v buy)

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