Answer Happy

You currently make a part on old equipment at a cost of $200,000 per year and a variable cost of $15 / unit. You have found an outside supplier who will charge you $25 per unit together with the annual fixed costs of $100,000/year. The following table summarizes the details of this make versus buy decision. Alternative Buy from outside supplier Make by your own Fixed Cost $100,000 per year Variable Cost $25 per unit $200,000 per year $15 per unit If the annual quantity of all customer orders is 8000 units each year, which alternative you would prefer? O Make by your own. Either buy or make decision is indifferent. O Buy from outside supplier. Use both alternatives simultaneously.