Which it will be indifferent between purchasing-making part

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Reference no: EM13788165

Ellie Industries currently manufactures 30,000 units of part MR24 a month for use in production . The facilities now being used to produce part MR 24 have a fixed monthly cost of of $150,000 and a capacity to produce 35,000 units per month. If Ellie were to buy part from outside supplier, the facilities would be idle, but its fixed cost would continue at 40% of their present amount. The variable production costs of part MR24 are $11 per unit. If Ellie Industries is able to obtain part MR24 from an outside supplier at a unit purchase price of $15, the monthly usage at which it will be indifferent between purchasing and making part is:

A) 30,000 units B) 32,000 units C) 35,000 units D) 22,500 units E) None

Reference no: EM13788165

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