Determine the range of annual production

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Reference no: EM13110014

A firm plans to begin production of a new small appliance. The manager must decide whether to purchase the motors for the appliance from a vendor for $7 each or to produce them in-house. Either of two processes could be used for the in-house production. Production Option One would have an annual fixed cost of $160,000 and a variable cost of $5 per unit. Production Option Two would have an annual fixed cost of $190,000 and a variable cost of $4 per unit. Determine the range of annual production for which each of the alternatives would be best.

Reference no: EM13110014

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