What is the total cost at break-even point

Assignment Help Operation Management

Reference no: EM132140883

A Las Vegas, Nevada, manufacturer has the option to make or buy one of its components parts. The annual requirement is 10,000 units. To make the parts in-house,the firm must invest $30,000 in capital equipment and estimates that the parts cost $6 each. The firm estimates that it costs $1,000 to prepare the contract with supplier.

Assume that a supplier is able to supply the parts for $10 each

A) What is the break-even quantity?

B) What is the total cost at break-even point?

Assume that the firm can negotiate a contract to buy 10,000 units of its components parts from a supplier

C) what is the maximum purchase price (i.e unit price) that the firm should negotiate with the supplier?

Reference no: EM132140883

Questions Cloud

Analyze the findings from the articles you researched : You are expected to assess the Domestic Violence client population. Conduct extensive research regarding the client population.

Compare and contrast the price factor| : Under what circumstances are price factors more important than non-price factors during a source selection?

Define aspects of researching and developing strategies : Considering the aspects of researching and developing strategies, what areas do you think our current healthcare administrators struggle with the most?

Calculate the acid-test ratio for alpha company : ACCT 101: Explain the purpose of the acid-test ratio. Calculate the acid-test ratio for ALPHA Company.

What is the total cost at break-even point : What is the break-even quantity? What is the total cost at break-even point?

Evaluate employee empowerment initiatives : You will evaluate employee empowerment initiatives. Through this article review, you will learn how to determine whether an employee empowerment initiative.

What should the target inventory level be : The lead time is one week, the monthly demand is 32,000 units, and safety stock is 100 units, what should the target inventory level be?

What you think is the role of social workers in equal rights : Your reaction to this statement of the National Association of Social Workers (NASW). Describe what you think is the role of social workers in equal rights.

If all countries eliminated all barriers to immigration : If all countries eliminated all barriers to immigration, would global economic growth increase? Why or why not?

User Account

All Pages