Vista Company manufactures electronic equipment. In 2015 it purchased from an outside supplier the special switches used in each of its products. The supplier charged Vista $2 per switch. As an alternative, Vista's CEO considered purchasing either machine A or machine B so the company could manufacture its own switches. The CEO decided at the beginning of 2016 to purchase Machine A, based on the following data:

Required
1. Assume that Machine A has not been purchased. What is the indifference point between purchasing Machine A and purchasing the switches from the outside vendor?
2. Assume that Machine A has already been purchased. Is it preferable to use Machine A to make the switches or to purchase the switches from the external supplier?
3. At what volume level should Vista consider replacing Machine A with Machine B?
4. Use the Goal Seek function in Excel to determine the volume-indifference level you calculated above in requirement 3.

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Machine A Machine B Annual fixed cost Variable cost per switch $135,000 S0.65 $204,000 S0.30 Supplier charge per switch S2.00