# You currently make a part for old equipment at a cost of \$40/unit. The

Question: You currently make a part for old equipment at a cost of \$40/unit. The annual fixed cost for this equipment is \$50,000. You have found an outside supplier who will make the part for \$30 / unit if you will pay their annual fixed costs of \$200,000/year (see table). ALTERNATIVE FIXED COST VARIABLE COST \$30 per unit Buy \$200,000 per year Make \$50,000 per yearShow transcribed image textTranscribed image text: You currently make a part for old equipment at a cost of \$40/unit. The annual fixed cost for this equipment is \$50,000. You have found an outside supplier who will make the part for \$30 / unit if you will pay their annual fixed costs of \$200,000/year (see table). ALTERNATIVE FIXED COST VARIABLE COST \$30 per unit Buy \$200,000 per year Make \$50,000 per year \$40 per unit a) Refer to the instruction above. What is the break even quantity between buying and making? (8 marks) b) Refer to the instruction above. What are total costs to buy an annual quantity of 40,000 units? (3 marks) c) Refer to the instruction above. What are total costs to make a quantity of 40,000 units per year? (3 marks) d) Refer to the instruction above. For what range of output would you prefer to buy? (3 marks) e) Refer to the instruction above. For what range of output would you prefer to make? (3 marks) f) Refer to the instruction above. What does the company save for the year by selecting the low- cost option (for annual requirements of 40,000 units)?(5 marks)