A firm is evaluating the alternative of manufacturing a part that is currently being outsourced from a supplier. The relevant information is provided below:For in-house manufacturing:Annual fixed cost=$75,000Variable cost per part=$110 For purchasing from supplier:Purchase price per part=$140 For this information, use the Break-Even Excel template to find the best decision if the demand is 7,000. Round your answers to the nearest dollar.Total cost of production: $ ___________Total cost of outsourcing: $ ___________The best decision is to ________ (manufacture in house or outsource?).Determine the break-even quantity for which the firm would be indifferent between manufacturing the part in-house or outsourcing it. Use the Excel Goal Seek tool. Round your answer to the nearest whole number. ________ parts

Answered: A firm is evaluating the alternative of…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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A firm is evaluating the alternative of manufacturing a part that is currently being outsourced from a supplier. The relevant information is provided below:

For in-house manufacturing:

Annual fixed cost

$75,000

Variable cost per part

$110

For purchasing from supplier:

Purchase price per part

$140

For this information, use the Break-Even Excel template to find the best decision if the demand is 7,000. Round your answers to the nearest dollar.

Total cost of production: $ ___________
Total cost of outsourcing: $ ___________

The best decision is to ________ (manufacture in house or outsource?).
Determine the break-even quantity for which the firm would be indifferent between manufacturing the part in-house or outsourcing it. Use the Excel Goal Seek tool. Round your answer to the nearest whole number.

________ parts

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