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A company asked one of their analysis team to analyze and create models that help decide whether they should manufacture a particular product or outsource its production. The different components are given below.

Fixed Cost, FC = $25,000

Material Cost per Unit, MC = $2.15

Labor Cost per Unit, LC = $2.00

Outsourcing Cost per Unit, O = $4.50

A: Build a spreadsheet model and then construct a one-way data table with production volume as the column input and savings due to outsourcing as the output. Breakeven occurs when savings equal zero. Vary production volume from 0 to 100,000 in increments of 10,000. In which interval of production volume does breakeven occur?

B: Using the appropriate Excel tool, find the exact breakeven point.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92076880

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