Problem
A company plans to begin production of a new small appliance. The manager must decide whether to purchase the motor for the appliance from a vendor at $8 each or to produce them in-house. Either of two processes could be used for in-house production; Process A would have an annual fixed cost of $186,000 and a variable cost of $5 per unit, and the Process B would have an annual fixed cost of $153,000 and a variable cost of $6 per unit. Determine the range of annual quantity for which each of the alternatives would be best.