Two Alternatives Are Being Considered for a Customer's Order Whose

Essay

Two alternatives are being considered for a customer's order whose anticipated volume is not yet known.If the firm produces in-house, the fixed cost is $340,000 and variable cost is $2.90 per unit.If the firm chooses to outsource, it will incur a fixed of $275,000 and variable cost is $3.50 per unit.Determine the breakeven quantity and a decision rule of when to outsource.