3. You currently purchase a part used in your production process from an outside supplier, and have decided to begin making this part in-house. You have two equipment options for moving production in-house: special-purpose equipment and general-purpose equipment. Cost information for these two options is as follows: Scenario 2.6 VARIABLE COST $15 per unit $20 per unit FIXED COST ALTERNATIVE Special-Purpose Equipment $200,000 per year General-Purpose Equipment $50,000 per year ) Use Scenario 2.6 to answer this question. What is the breakeven quantity between the two options? A) 30,000 units per year B) 40,000 units per year C) 50,000 units per year D) 60,000 units per year ii) Use Scenario 2.6 to find the truth. What are total costs under the Special-Purpose Equipment option for an annual quantity of 40,000 units? A) $400,000 B) $500,000 C) $800,000 D) $850,000
3. You currently purchase a part used in your production process from an outside supplier, and have decided to begin making this part in-house. You have two equipment options for moving production in-house: special-purpose equipment and general-purpose equipment. Cost information for these two options is as follows: Scenario 2.6 VARIABLE COST $15 per unit $20 per unit FIXED COST ALTERNATIVE Special-Purpose Equipment $200,000 per year General-Purpose Equipment $50,000 per year ) Use Scenario 2.6 to answer this question. What is the breakeven quantity between the two options? A) 30,000 units per year B) 40,000 units per year C) 50,000 units per year D) 60,000 units per year ii) Use Scenario 2.6 to find the truth. What are total costs under the Special-Purpose Equipment option for an annual quantity of 40,000 units? A) $400,000 B) $500,000 C) $800,000 D) $850,000
Chapter19: Pricing Concepts
Section: Chapter Questions
Problem 6DRQ
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