Seven Ses Sailboat company manufactures 100, luxiry yachts per month. A compact

Question

Seven Ses Sailboat company manufactures 100, luxiry yachts per month. A compact media Center is included in each yacht. Seven seas sailboat manufactures the media center in house. the company is considering the possibility of outsourcing the production of media center in order to close down some of its facilities and reduce dministrative cost. At presenst the variable cost per unit is $250, and fixed cost are $39,000, per moth. assuming the company outsources production of media centeand the fixed cost could be eliminated entirely. at what contrast cost would outsourcing pay off for seven seas? (rouand to the nearest whole dollar )$250 per unit

B. at any cost lower than 350, per unit

C. at any cost lower than 740, per unit

D. at any cost lower than 640 per unit

A. at any coslt lower than

Explanation / Answer

Answer. D. at any cost lower than 640 per unit Savings in Variable Cost - $250 X 100 Nos          25,000 Savings in Fixed Cost          39,000 Total Savings on Outsourcing          64,000 Contract cost per Compact Media ($64000/100)                640

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