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Aleonysh [2.5K]
3 years ago
11

Given the following make-buy information, what would be the break-even point?Make Option Buy OptionFixed Costs $15000$1250Variab

le Costs $ 5$ 10a. 917 unitsb. 2875 unitsc. 1083 unitsd. 2750 units
Business
1 answer:
grin007 [14]3 years ago
3 0

Answer:

d. 2750 units

Explanation:

The break-even point occurs when the make option cost equals the buy option cost. The number of units 'x' needed in order for both options to yield the same costs is given by:

\$15,000+x*\$5=\$1,250+x*\$10\\\\x=\frac{\$15,000-\$1,250}{\$10-\$5}\\\\x=2,750\ units

The break-even point is 2,750 units

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