Analytical approach and graphical representation

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Reference no: EM132320657

Your plant can make a certain component in house by utilizing equipment and facilities with fixed costs of $10,000.00. The material cost per unit for this component is $6.00 and the labour amounts to $12.00 per unit. Conversely, your plant may buy this component from another manufacturer at a price of $56.00 per unit. Use the "break-even of cost lines" approach to determine the ranges of quantity over which the item should be made in house and, respectively, bought from the outside supplier. You must use both the analytical approach (calculation) and the graphical representation (a diagram).

Reference no: EM132320657

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