A firm plans to begin production of a new small appliance The manager must decide whether to purchase the motors for the

Question

A firm plans to begin production of a new small appliance The manager must decide whether to purchase the motors for the appliance from a vendor at 11 each or to produce them in house Either of two processes could be used for in house production Process A would have an annual fixed cost of 200 000 and a variable cost of 6 per unit and Process B would have an annual fixed cost of 165 000 and a variable cost of 7 per unit Determine the range of annual volume for which each of the alternatives would be best Round your first answer to the nearest whole number Include the indifference value itself in this answer For annual volumes of purchase from the vendor or less is best For annual volumes above that amount process A process B is best

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