Multiple Choice
A firm is considering whether to continue to buy a particular component or to make the component themselves. There is no fixed cost associated with buying the component, but each component costs $17 to purchase. If the firm makes the component, it will incur a fixed cost of $5,000, but will be able to produce each component for $10. What is the break-even quantity?
A) 500 units
B) 7 units
C) 714.3 units
D) 294.1 units
Correct Answer:
Verified
Correct Answer:
Verified
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