Business, 02.07.2019 22:10 jonellelewis706

Hahn manufacturing has been purchasing a key component of one of its products from a local supplier. the current purchase price is $1600 per unit. efforts to standardize parts have succeeded to the point that this same component can now be used in five different products. annual component usage should increase from 150 to 800 units. management wonders whether it is time to make the component in-house, rather than to continue buying it from the supplier. fixed costs would increase by about $35,000 per year for the new equipment and tooling needed. the cost of raw materials and variable overhead would be about $1120 per unit, and labor costs would go up by another $180 per unit produced. what is the quantity where the costs of both the make and buy options are the same?

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Hahn manufacturing has been purchasing a key component of one of its products from a local supplier....