Truman Company assembles products from a group of interconnecting parts.The company produces some of the parts and buys some from outside vendors.The vendor for Part Y has just increased its price by 35%,to $5 per unit for the first 5,000 units and $4.50 per additional unit ordered each year.The company uses 7,500 units of Part Y each year.Unit costs if the company makes the part are as follows:
Should Truman Company continue to purchase Part Y or begin making it?

Question

Truman Company assembles products from a group of interconnecting parts.The company produces some of the parts and buys some from outside vendors.The vendor for Part Y has just increased its price by 35%,to $5 per unit for the first 5,000 units and $4.50 per additional unit ordered each year.The company uses 7,500 units of Part Y each year.Unit costs if the company makes the part are as follows:
  Should Truman Company continue to purchase Part Y or begin making it?

Quizplus · Accepted Answer

The Answer of Truman Company assembles products from a group of interconnecting parts.The company produces some of the parts and buys some from outside vendors.The vendor for Part Y has just increased its price by 35%,to $5 per unit for the first 5,000 units and $4.50 per additional unit ordered each year.The company uses 7,500 units of Part Y each year.Unit costs if the company makes the part are as follows:
  Should Truman Company continue to purchase Part Y or begin making it?

Truman Company Assembles Products from a Group of Interconnecting Parts