A Company Has Two Alternatives for Meeting a Customer Requirement

Multiple Choice

A company has two alternatives for meeting a customer requirement for 9,000 units of a specialty molding.If done in-house, fixed cost would be $350,000, with variable cost at $30 per unit.If outsourced, the cost is $80 per unit.Determine the breakeven point and determine if they should make the item in-house or outsource it.

A) breakeven point = 7,000 units; outsource
B) breakeven point = 7,000 units; make in-house
C) breakeven point = 11,667 units; outsource
D) breakeven point = 11,667 units; make in-house