Reference no: EM132771446

Question - Tesla Industries is a multiproduct company that currently manufactures 30,000 units of Part ECHO each month for use in production. The facilities now being used to produce Part ECHO have affixed monthly cost of $150,000 and a capacity to produce 84,000 units per month. If Tesla were to buy Part ECHO from an outside supplier, the facilities would be idle, but its fixed costs would continue at 40 percent of its present amount. The variable production costs of Part ECHO are $11 per unit. If Tesla Industries can obtain Part ECHO from an outside supplier at a unit purchase price of $12.875, what is the monthly usage at which it will be indifferent between purchasing and making Part ECHO?