A company is deciding whether to outsource a key component of its product or not....
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A company is deciding whether to outsource a key component of its product or not. The company can buy the component from a vendor for $20/unit. Buying the component from that vendor saves the company $500,000 in fixed manufacturing overhead. The company incurs unit variable costs of $12/unit to produce the component. There are no other relevant costs. At what production level (in number of units produced) does the company become indifferent between outsourcing and keeping the production in-house? O 65,000 O 50,000 0 25.000 O 60,000
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