Saran company has contacted crane with an offer to sell it 5,100 of the wickets for $16 each. if crane makes the wickets, variable costs are $14 per unit. fixed costs are $8 per unit; however, $5 per unit is unavoidable. should crane make or buy the wickets?

Crane should buy the wicket as it result in saving of $ 1100

Explanation:

Given:

Quantity = 5,100

Price = $16

Variable cost = $14 per unit

Fixed costs = $8 per unit

Buying Cost = 5100 * 16 = $ 81,600

Making Cost = Variable Costs + Avoidable Fixed Costs

Making Cost  = 14 * 5100 + (8 - 5) * 5100 = $ 86,700

Crane should buy the wicket as it result in saving of $ 1100 ($86,700 - $81,600).

hi there, i would say your answer is:

b. there is a fixed quantity of resources and technology available.

hope that : )

answermarket demand;