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7 years ago
Seven Seas Sailboats Company manufactures 100 luxury yachts per month. A compact media center is included in each yacht. Seven Seas Sailboats manufactures the media center in-house. The company is considering the possibility of outsourcing the production of the media center in order to close down some of its facilities and reduce administrative costs. At present, the variable cost per unit is $275, and fixed costs are $39,000 per month. Assuming the company outsources the production of media center and the fixed costs could be eliminated entirely, at what contract cost would outsourcing pay off for Seven Seas? (Round to the nearest whole dollar.)
A) at any cost lower than $390 per unit
B) at any cost lower than $665 per unit
C) at any cost lower than $275 per unit
D) at any cost lower than $765 per unit
Textbook 
Horngren's Financial & Managerial Accounting, The Financial Chapters

Horngren's Financial & Managerial Accounting, The Financial Chapters


Edition: 5th
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Mrgo-breedMrgo-breed
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Deprecated Author
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#2
7 years ago
Makes perfect sense, thx
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#3
7 years ago
Excellent Slight Smile
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