Use the Following Information to Answer the Questions Below

question 98

Multiple Choice

Use the following information to answer the questions below.
You currently make a part for old equipment at a cost of $20 / unit. The annual fixed cost for this equipment is $50,000. You have found an outside supplier who will make the part for $15 / unit if you will pay their annual fixed costs of $200,000 / year (see table) .

-Refer to the instruction above. What is the break even quantity between buying and making?

• A) 30,000 units per year
• B) 40,000 units per year
• C) 50,000 units per year
• D) 60,000 units per year

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Definitions:

Pericardium

The fibrous sac that surrounds the heart and the roots of the great blood vessels, providing protection and support.

Mediastinum

The central compartment of the thoracic cavity between the lungs, containing the heart, esophagus, trachea, and other structures.

Diaphragm

A major muscle involved in breathing, separating the thoracic cavity from the abdominal cavity.

Ligamentum Arteriosum

A small ligament that is the remnant of the ductus arteriosus formed within 3 weeks after birth.