You are given the following information: Costs Make option Buy Option Fixed Cost $125,000 $5,000 Variable Cost
Question:
Costs Make option Buy Option Fixed Cost $125,000 $5,000 Variable Cost $15 $17
A. Find the break even quantity and the total cost at the breakeven point.
B. If the requirement is 150,000 units, is it more cost- effective for the firm to buy or make the components? What is the cost savings for choosing the cheaper option?
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Step by Step Answer:
A Let Q be the break even quantity Total cost to make total cost to buy 125000 15Q 500...View the full answer
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Related Book For 
Principles of Supply Chain Management A Balanced Approach
ISBN: 978-1337406499
5th edition
Authors: Joel D. Wisner, Keah Choon Tan, G. Keong Leong
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