C&A can either make a part in-house or buy it from a supplier. C&A needs 70,000...
C&A can either make a part in-house or buy it from a supplier. C&A needs 70,000 of this part each year. Consider the following cost data:
|
Source |
Fixed cost |
Unit variable cost |
|
Make |
$10,125 |
$12.50 |
|
Buy |
$0 |
$14.75 |
- Should C&A make or buy the product?
- At what quantity will C&A be indifferent towards making or buying the part?
- Should C&A make or buy the part if demand is 40,000 parts?
- Should C&A make of buy the part if demand is 100,000 parts?
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