What is the maximum variable cost per weld

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Demron is in serious negotiations to purchase a welding machine that will enable them to perform their own welding. They currently have their welding outsourced at a cost of? $1.50 per weld and a fixed cost of? $45,000. Their marketing team feels that they can sustain an annual sales volume sufficient to require? 35,000 welds.

If a fancy new welding rig costs? $13,500 what is the maximum variable cost per weld that Demron should be willing to pay in order to bring this process? in-house?

Reference no: EM132300360

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