Use the Following Information to Answer the Questions Below

question 65

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. For what range of output would you prefer to buy?

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

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