Scenario 2.6 You Currently Purchase a Part Used in Your Production Process

Multiple Choice

Scenario 2.6
You currently purchase a part used in your production process from an outside supplier, and have decided to begin making this part in-house. You have two equipment options for moving production in-house: special-purpose equipment and general-purpose equipment. Cost information for these two options is as follows:

-Use Scenario 2.6 to solve this riddle. For what range of output is the General-Purpose Equipment the low-cost option?

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