Question

White & Checker is releasing a new power drill that requires the manufacturing of a new part.They are considering whether they should manufacture the part in-house or outsource it from a supplier.The demand forecast is 1,355 units.They calculate the break-even quantity as 1,750 parts.What decision should White & Checker make? A) The product should not be released,as the demand is not high enough. B) A percentage of the product should be manufactured in-house,and the rest should be outsourced. C) The part should be outsourced. D) The part should be manufactured in-house.

Answer 1

A

Step-by-step explanation:

Breakeven quantity is the number of units produced and sold at which net income is zero

The product should not be released because the demand is less than breakeven quantity. If the product is released, the firm would earn losses