Determine the range of annual volume

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Reference no: EM131007710

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 at $7 each or to produce them in-house. Either of two processes could be used for in-house production; one would have an annual fixed cost of $160,000 and a variable cost of $5 per unit, and the other would have an annual fixed cost of $190,000 and a variable cost of $4 per unit. Determine the range of annual volume for which each of the alternatives would be best. (Round your answer to the nearest whole number.)

For annual volume less than , (Click to select) production in house at $5 per unit purchase from the vendor production in house at $4 per unit is best. For larger quantities, best to produce in house at $ per unit.

Reference no: EM131007710

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