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A company wants to introduce a new product and has two options to consider. The first option is to make the product in-house for a yearly fixed cost of $187,754 and a variable cost of $3.2 per unit. The second option is to outsource the product for a yearly fixed cost of $35,217 and a variable cost of $12.0 per unit. Assume the unit selling price of the new product is $26.9. If the company outsources the product and the sales volume (quantity) is 30,687 units per year, then the company would expect to get a yearly profit of dollars.

A company wants to introduce a new product and has two options to consider. The first option is to make the product in-house for a yearly fixed cost of $187,754 and a variable cost of $3.2 per unit. The second option is to outsource the product for a yearly fixed cost of $35,217 and a variable cost of $12.0 per unit. Assume the unit selling price of the new product is $26.9. If the company outsources the product and the sales volume (quantity) is 30,687 units per year, then the company would expect to get a yearly profit of dollars.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A company wants to introduce a new product and has two options to consider. The first option is to make the product in-house for a yearly fixed cost of $187,754 and a variable cost of $3.2 per unit. The second option is to outsource the product for a yearly fixed cost of $35,217 and a variable cost of $12.0 per unit. Assume the unit selling price of the new product is $26.9. If the company outsources the product and the sales volume (quantity) is 30,687 units per year, then the company would expect to get a yearly profit of dollars. Use at least 4 decimals.
Transcribed Image Text:A company wants to introduce a new product and has two options to consider. The first option is to make the product in-house for a yearly fixed cost of $187,754 and a variable cost of $3.2 per unit. The second option is to outsource the product for a yearly fixed cost of $35,217 and a variable cost of $12.0 per unit. Assume the unit selling price of the new product is $26.9. If the company outsources the product and the sales volume (quantity) is 30,687 units per year, then the company would expect to get a yearly profit of dollars. Use at least 4 decimals.
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