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What is the cost savings for choosing cheaper option

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Reference no: EM133074867

You are given the following information: Answer question in excel format COSTS MAKE OPTION BUY OPTION

Fixed Cost $125,000 $5,000
Variable Cost $15 $17

a. Find the break-even quantity and the total cost at the break-even point.

b. If the requirement is 150,000 units, is it more cost-effective for the firm to buy or make the components? What is the cost savings for choosing the cheaper option?

Reference no: EM133074867

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