a. $70,000 b. $102,500 c. $210,000 d. $320,000 e. $82,500 24. What is the break-even point (the quantity for which savings due to outsourcing is 0)? a. 125,000 b. 217,000 c. 240,000 d. 410,000 e. 150,000
Homework Answers
| Fixed Cost of manufacturing | 360000 |
| Material Cost per unit | 0.5 |
| Labor cost per unit | 3.5 |
| Variable Cost (Material + Labor) | (3.5+0.5)*Q = 4*15000 = 60000 |
| Total Manufacturing Cost | (3.5+0.5)*Q + 360000 = 420000 |
| Per unit variable cost of purchasing/Outsourcing cost | 5.5 |
| Total outsourcing cost | 5.5*Q = 5.5*15000 = 82500 |
22. Total Manufacturing cost = 420,000
Correct option: D)
23. Total outsourcing cost = 82500
Correct option: E)
24. Breakeven point calculation:
Savings due to outsourcing = Total outsourcing cost - Total Manufacturing cost = 0
5.5*Q = 4*Q + 360000
1.5*Q = 360000
Quantity = Q = 240,000
Correct option: C)
Add Answer to:
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