A manager is trying to decide whether to purchase a certain part or to have it produced internally. Internal production could use either of 2 processes. One would ntail a VC of $17 per unit & annual FC of $180k; the other would entail a VC of $15 per unit & annual FC of $230k. Two vendors are willing to provide the part. Vendor A as a price of $30 per unit for any volume up to 50k units. Vendor B has a price of $32 per unit for demand of 5k units or less & $28 per unit for larger quantities. ) If selling price per unit is $45 what is the breakeven point. If the manager anticipates an annual volume of 10k units, which alternative would be best from a cost standpoint? Which Alternative would entail the highest profit?

A manager is trying to decide whether to purchase a certain part or to have it produced internally. Internal production could use either of 2 processes. One would ntail a VC of $17 per unit & annual FC of $180k; the other would entail a VC of $15 per unit & annual FC of $230k. Two vendors are willing to provide the part. Vendor A as a price of $30 per unit for any volume up to 50k units. Vendor B has a price of $32 per unit for demand of 5k units or less & $28 per unit for larger quantities. ) If selling price per unit is $45 what is the breakeven point. If the manager anticipates an annual volume of 10k units, which alternative would be best from a cost standpoint? Which Alternative would entail the highest profit?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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