(Answered) Mark berenson is ceo of montclair electronics he is

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Mark Berenson is CEO of Montclair Electronics. He is currently producing 80,000 video telephones a year in his New Jersey plant, where fixed cost are $900,000 and the variable cost per unit is $5. By outsourcing to a Mexican firm, annual fixed cost payments will rise to $1 million.

a) When the variable cost of outsourcing is $4 per unit, what is the break-even quantity in this case? Please provide the formula, at least one step of calculation, and the correct answer for full credit.

b) Should the company outsource and why?

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