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Calculate the cross-over quantity for two alternatives

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Reference no: EM132730029

A manager must decide whether to make or buy (i.e., outsource) a certain item used in the production of its vending machines. If the manager decides to make the item in-house, the process would incur $300,000 of annual fixed costs and $1.5 per unit of variable costs. If it is outsourced, a supplied has offered to make it for a variable cost of $4.05 per unit. Calculate the cross-over quantity for these two alternatives.

Reference no: EM132730029

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