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Robinson Crusoe Was Trying to Decide If They Should Continue

Question 4

Multiple Choice

Robinson Crusoe was trying to decide if they should continue making candy machines or outsource to a supplier. Their fixed costs to make them in house were $3,750, and the variable costs were $1.35 per unit. One of their suppliers in Mexico made a similar product for $5.75 per unit.
-If Robinson needed 1,000 units, which option should be preferred?


A) Choose to make in house
B) Order from the supplier in Mexico
C) Either, since both have the same costs
D) Neither, since both will incur enormous loss to the company's operations
E) Need additional information to decide

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