Outsource or In-House-A company has two alternatives for meeting a customer requirement
A company has two alternatives for meeting a customer requirement for 9,000 units of a specialty molding. If done in-house, fixed cost would be $350,000 with variable cost at $30 per unit. Alternative two is to outsource for a total cost of $80 per unit. Determine the breakeven quantity and determine if one should make the item in-house or outsource it. Please show all of your work and make sure that you define what this all means from a business perspective.
A company has two alternatives for meeting a customer requirement for 9,000 units of a specialty molding. If done in-house, fixed cost would be $350,000 with variable cost at $30 per unit. Alternative two is to outsource for a total cost of $80 per unit. Determine the breakeven quantity and determine if one should make the item in-house or outsource it. Please show all of your work and make sure that you define what this all means from a business perspective.
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