Q. For data below, determine whether outsourcing of particular manufacturing operation makes financial sense:
Current variable cost per unit $10.00.
Current fixed costs in total $100,000.
Current fixed costs attributed to this product line $60,000.
Quote from an outside vendor to perform operation $13.00.
Anticipated volume of widgets needed is 10,000.
Make sure to show your work so you can earn partial credit if your answer is wrong