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Use the Following Scenario to Answer the Questions Below

Question 48

Multiple Choice

Use the following scenario to answer the questions below.
You currently make a part on old equipment at a cost of $50,000 per year and a variable cost of $20 / unit.You have found an outside supplier who will make the part for $15 / unit if you will pay their annual fixed costs of $200,000 / year.The following table summarizes the details of this make versus buy decision.
Use the following scenario to answer the questions below. You currently make a part on old equipment at a cost of $50,000 per year and a variable cost of $20 / unit.You have found an outside supplier who will make the part for $15 / unit if you will pay their annual fixed costs of $200,000 / year.The following table summarizes the details of this make versus buy decision.    -Refer to the instruction above.For what range of output would you prefer to make? A) 40,000 or more units per year B) 0 - 40,000 units per year C) 30,000 or more units per year D) 0 - 30,000 units per year
-Refer to the instruction above.For what range of output would you prefer to make?


A) 40,000 or more units per year
B) 0 - 40,000 units per year
C) 30,000 or more units per year
D) 0 - 30,000 units per year

Correct Answer:

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