Use the Following Scenario to Answer the Questions Below

question 17

Multiple Choice

Use the following scenario to answer the questions below.
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.

-Refer to the instruction above.For what range of output would you prefer to make?

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