Outsource new toxic-free miracle carpet cleaner

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Reference no: EM131426698

ABC Company must decide whether to insource or outsource a new toxic-free miracle carpet cleaner that works with its new equipment. If it decides to insource the product, the process would incur $600,000 of annual fixed costs and $3.0 per unit of variable costs. If it is outsourced, a supplier has offered to make it for an annual fixed cost of $240,000 and a variable cost of $4.50 per unit in variable costs.

Given these two alternatives, determine the indifference point (where total costs are equal).

Reference no: EM131426698

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