Question

Stanley Inc., has a need for a specific component in there manufacturing process. They has requested bids from three of it's subcontractors. Company A has an initial cost of $47,500.00 and variable costs of $76.00 per unit. Company B has an initial cost of $66,000 and variable costs of $56.75 per unit. Company C has an initial cost of $75,000 and variable costs of $51.50 per unita.
A. What are the crossover points?
B. At what output does Company B become less expensive than company A?
C. At what output does Company C become less expensive than Company B?
D. The forecasted amount of components required for the manufacturing process 1,500 units, which company should Stanley Inc. choose?

Answer 1

Answer:

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