1. You are given the following information: Make Option Buy Option $25,000 $3,000 $12 Costs Fixed Cost Variable Cost $8 1. Find the break-even quantity and the total cost at the break-even point. 2. If the requirement is 4,500 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? 3. If the requirement is 6,000 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

1. You are given the following information: Make Option Buy Option $25,000 $3,000 $12 Costs Fixed Cost Variable Cost $8 1. Find the break-even quantity and the total cost at the break-even point. 2. If the requirement is 4,500 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? 3. If the requirement is 6,000 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

Essentials of Business Analytics (MindTap Course List)

2nd Edition

ISBN:9781305627734

Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Chapter15: Decision Analysis

Section: Chapter Questions

Problem 19P: A firm has three investment alternatives. Payoffs are in thousands of dollars. a. Using the expected...

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