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bachelor in business administration
Polytechnic State University Sanluis
Jan-2006 - Nov-2010
CPA
Polytechnic State University
Jan-2012 - Nov-2016
Professor
Harvard Square Academy (HS2)
Mar-2012 - Present
11-34   Make or Buy; Continuation of Problem 9-28 (Chapter 9) Calista Company manufactures electronic equipment In 2009, it purchased the special switches used in each of its products from an outside supplier. The supplier charged Calista $2 per switch. Calista’s CEO considered purchasing either machine X or machine Y so the company could manufacture its own switches. The CEO decided at the beginning of 2010 to purchase Machine X, based on the following data:
Annual fixed cost Machine X
$135,000 Machine Y
$204,000
Variable cost per switch 0.65 0.30
Required
1. Â Â For machine X, what is the indifference point between purchasing the machine and purchasing from the outside vendor?
2. Â Â At what volume level should Calista consider purchasing Machine Y?
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