A global manufacturer of electrical switching equipment? (ESE) is considering outsourcing the manufacturing of an electrical breaker used in the manufacturing of switch boards. The company estimates that the annual fixed cost of manufacturing the part? in-house, which includes? equipment, maintenance, and? management, amounts to?$10 million. The variable cost of labor and materials are ?$13.00 per breaker. The company has an offer from a major subcontractor to produce the part for $ 21.00 per breaker.
a. How many breakers would the electrical switching equipment company need per year to make the? in-house option the least? costly?
The company should consume more than 1,250,000 breakers per year to make the manufacturing the part? in-house option the least costly. ?(Enter your response rounded to the nearest whole? number.)
b. Assume the subcontractor wants the company to share in the costs of the equipment. The ESE company estimates that the total cost would be $6 ?million, which also includes management oversight for the new supply contract. For this? concession, the subcontractor will drop the per unit price to $15.00 Under this? assumption, how many breakers would the ESE company need per year to make the? in-house option least? costly?
The company should consume more than less than ____ breakers per year to make the manufacturing the part? in-house option the least costly. ?(Enter your response rounded to the nearest whole? number.)
Part A of the answer is solved and is correct Please solve for B.