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A US Motorcycle Manufacturer Has the Option of Either Making the the Gas

Question 65

Multiple Choice

A U.S. motorcycle manufacturer has the option of either making the gas tank in their newly designed motorcycle, or subcontracting it to a manufacturer from Sinagpore. The manufacturer expects to produce 1,000 units per year. Costs for the two options are:
 Source  Fixed Cost  Variable Cost  Make in-house $15,000$21.50 Buy from Singapore $0$29.00\begin{array}{|l|c|c|}\hline \text { Source } & \text { Fixed Cost } & \text { Variable Cost } \\\hline \text { Make in-house } & \$ 15,000 & \$ 21.50 \\\hline \text { Buy from Singapore } & \$ 0 & \$ 29.00 \\\hline\end{array}
-The volume they are indifferent regarding the decision to make or buy is _____ units.


A) less than or equal to 2,000
B) more than 2,000 but less than or equal to 4,000
C) more than 4,000 but less than or equal to 6,000
D) more than 6,000 but less than or equal to 8,000
E) more than 8,000.

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