Scenario 12.1 You Currently Make a Part on Old Equipment at a at a Cost

question 44

Multiple Choice

Scenario 12.1
You currently make a part on old equipment at a cost of $50,000 per year and a variable cost of $20 / unit. 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. The following table summarizes the details of this make versus buy decision.

-Use Scenario 12.1 to answer the question. For what range of output would you prefer to make?

• A) 40,001 or more units per year
• B) 35,001 - 40,000 units per year
• C) 30,001 to 35,000 units per year
• D) 0 - 30,000 units per year

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Definitions:

Powdered Gloves

Gloves that are dusted with a powder to make them easier to put on or take off, now less common in medical use due to allergy concerns.

Employee Health Services

Programs and services offered by employers to maintain and promote the health and well-being of their employees.

Neutrophil Count

A measure of the number of neutrophils, which are a type of white blood cell, in the blood; important for determining the body's capacity to fight infections.

Acute Bacterial Infection

A rapid onset infection caused by bacteria, characterized by symptoms that develop quickly and are typically severe.