Find the break-even quantity and the total cost at the break-even point.

This is a detailed assignment to to know about break-even better. It basically an assignment of economics, as when you do an assignment you should be finding upon its cost and break-even point from where your investment is turned in to profit and this understanding is very important as a student it will be very helpful to you in the field.

a. Find the break-even quantity and the total cost at the break-even point.

b. If the requirement is 4,500 units, is it more cost-effective for the firm to buy or make the components? What is the cost savings for choosing the cheaper option?

c. If the requirement is 6,000 units, is it more cost-effective for the firm to buy or make the components? What is the cost savings for choosing the cheaper option?

3. A Las Vegas, Nevada, manufacturer has the option to make or buy one of its component parts. The annual requirement is 20,000 units. A supplier is able to supply the parts for $10 per piece. The firm estimates that it costs $600 to prepare the contract with the supplier. To make the parts in-house, the firm must invest $50,000 in capital equipment and estimates that the parts cost $8 per piece.

a. Assuming the cost is the only criterion, use break-even analysis to determine whether the firm should make or buy the item. What is the break-even quantity and what is the total cost at the break-even point?

b. Calculate the total costs for both options at 20,000 units. What is the cost savings for choosing the cheaper option?

4. A buyer received bids and other relevant information from three suppliers for a vital component part for its latest product. Given the following information, use total cost analysis to determine which supplier should be chosen. Late delivery of the component results in 70 percent lost sales and 30 percent back orders of finished goods.