Queen Inc. has the option to make or buy one of its component parts. The annual...

Queen Inc. has the option to make or buy one of its component parts. The annual requirement is 20,000 units. A supplier is able to supply the parts for $11 per piece. The firm estimates that it costs $ 600 to prepare the contract with the supplier. To make the part in-house, the firm must invest $50,000 in capital equipment and estimates that the parts cost $ 9 per piece. Complete the table below. Important! Enter all responses as whole numbers with a comma as needed (#,###).

Should the firm make or buy? (Enter Make or Buy)
What is the break-even quantity? (Enter as ##,### or #,###)
What is the total cost at the break-even point? (Enter as ###,### or ##,###)	$

Assume instead that the annual requirement is 27,000; calculate the total cost for both options and the cost savings for choosing the cheaper option.
Total cost for making at 27,000 units: (Enter as ###,### or ##,###)	$
Total cost for buying at 27,000 units: (Enter as ###,### or ##,###)	$
Cost savings from choosing the cheaper option: (Enter as ##,### or #,###)	$

Expert Solution

ekkarill92 answered 1 year ago

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