Make or Buy; Continuation of Exercise 9-22 (Chapter 9) Vista Company manufactures electron...

Make or Buy; Continuation of Exercise 9-22 (Chapter 9) Vista Company manufactures electronic equipment. In 2015, it purchased from an outside supplier the special switches used in each of its products. The supplier charged Vista $2 per switch. As an alternative, Vista’s CEO considered purchasing either machine A or machine B so the company could manufacture its own switches. The CEO decided at the beginning of 2016 to purchase machine A. based on the following data:

Required

1. Assume that machine A has not yet been purchased. What is the indifference point between purchasing machine A and purchasing the switches from the outside vendor?

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2. Assume that machine A has already been purchased. Is it preferable to use machine A to make the switches or to purchase the switches from the external supplier?

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3. At what volume level should Vista consider replacing machine A with machine B?

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4. Use the Goal Seek function in Excel to determine the volume-indifference level you calculated above in requirement 3.