A Manufacturing Company Needs to Know Whether to Make In-House$\begin{array}{lrr}
&\underline{\text {Make}}& \underline{\text {Buy }}\
\text {Fixed cost per year } &\$8,000&\$0\
\text { Variable cost per part } &\$5.45&\$6.93\
\end{array}$

Question

A Manufacturing Company Needs to Know Whether to Make In-House$\begin{array}{lrr}
 &\underline{\text {Make}}&  \underline{\text {Buy }}\
  \text {Fixed cost per year  } &\$8,000&\$0\
 \text { Variable cost per part } &\$5.45&\$6.93\
\end{array}$

Examlex · Accepted Answer

The Answer is a. Cost to make: $8,000 + $5.459,000) = $57,050
b. Cost to buy: $6.93 9,000) = $62,370
Make in-house since it has lower cost.
c. $8000 + $5.45X = $6.93X => X = 5405.40 = 5405

A Manufacturing Company Needs to Know Whether to Make In-House

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