Indifference point between making and buying components

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Reference no: EM133226135

Assignment:

Saber Electronics has been making components for its navigation system for years. The company is currently in the process of deciding whether it should purchase the components from others. The costs of manufacturing in-house include: direct labor $1.50 per unit, material $2 per unit, variable overhead $1 per unit, and fixed cost $15,000 per year. One supplier offers a price of $5.50 per unit, but it will also charge a shipping cost of $0.50 per unit. What is the indifference point between making and buying the components?

Reference no: EM133226135

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