A Company Has Two Alternatives for Meeting a Customer Requirement

question 26

Multiple Choice

A company has two alternatives for meeting a customer requirement for 9,000 units of a specialty molding.If done in-house, fixed cost would be $350,000, with variable cost at $30 per unit.If outsourced, the cost is $80 per unit.Determine the breakeven point and determine if they should make the item in-house or outsource it.

• A)breakeven point = 7,000 units; outsource
• B)breakeven point = 7,000 units; make in-house
• C)breakeven point = 11,667 units; outsource
• D)breakeven point = 11,667 units; make in-house

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Definitions:

Recessive Gene

A genetic trait that is expressed in an organism's phenotype only if two copies of the gene are present, but is masked if a dominant gene is present.

Dominant Gene

A gene that expresses its phenotypic trait even when only one copy is present in the genotype.

Recessive

A genetic term describing an allele that produces its characteristic phenotype only when its paired allele is identical.

Dominant

Pertaining to a trait, allele, or individual that supersedes others in influence, power, or expression in a genetic, social, or hierarchical context.