A part is to be used in the assembly of a product. Alternative 1 is to manufacture it in-hol and alternative 2 is to purchase from outside. Determine the break-even quantity per y between the two alternatives using the data gven in the table and i-10%. [Note: You may use TC=FC,+vQ and TC1 TC2 per year] Alternative 1: Manufacture the Part A machine will be needed for production: Initial cost of the machine will be P-$72,000 and salvage value will be F=$8000 dollars after 6 years of life. The variable production cost will be V=$1.6 per unit. Alternative 2: Purchase the part from Outside The part will be purchased at a cost of v2 $6 per unit.
A part is to be used in the assembly of a product. Alternative 1 is to manufacture it in-hol and alternative 2 is to purchase from outside. Determine the break-even quantity per y between the two alternatives using the data gven in the table and i-10%. [Note: You may use TC=FC,+vQ and TC1 TC2 per year] Alternative 1: Manufacture the Part A machine will be needed for production: Initial cost of the machine will be P-$72,000 and salvage value will be F=$8000 dollars after 6 years of life. The variable production cost will be V=$1.6 per unit. Alternative 2: Purchase the part from Outside The part will be purchased at a cost of v2 $6 per unit.
Chapter3: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 7EA: Flanders Manufacturing is considering purchasing a new machine that will reduce variable costs per...
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![7. A part is to be used in the assembly of a product. Alternative 1 is to manufacture it in-house
and alternative 2 is to purchase from outside. Determine the break-even quantity per year
between the two alternatives using the data gven in the table and i=10%.
[Note: You may use TC=FC+v,Q and TC1 TC2 per year]
Alternative 1:
Manufacture
the Part
A machine will be needed for production. Initial cost of the
machine will be P=$72,000 and salvage value will be F=s8000
dollars after 6 years of life. The variable production cost will be
V=$1.6 per unit.
Alternative 2:
Purchase the
part from
Outside
The part will be purchased at a cost of v2=$6 per unit.
a)
12000 Units
b)
1500 Units
()
4568 Units
d)
3522 Units
e)
1364 Units
Leave blank](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F96037402-1ad2-4929-b933-df3649022d26%2F65ad69fd-d731-4b11-83de-a180928201e5%2Fnpbwv_processed.jpeg&w=3840&q=75)
Transcribed Image Text:7. A part is to be used in the assembly of a product. Alternative 1 is to manufacture it in-house
and alternative 2 is to purchase from outside. Determine the break-even quantity per year
between the two alternatives using the data gven in the table and i=10%.
[Note: You may use TC=FC+v,Q and TC1 TC2 per year]
Alternative 1:
Manufacture
the Part
A machine will be needed for production. Initial cost of the
machine will be P=$72,000 and salvage value will be F=s8000
dollars after 6 years of life. The variable production cost will be
V=$1.6 per unit.
Alternative 2:
Purchase the
part from
Outside
The part will be purchased at a cost of v2=$6 per unit.
a)
12000 Units
b)
1500 Units
()
4568 Units
d)
3522 Units
e)
1364 Units
Leave blank
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