In order to minimize cost, how many units of component X should be purchased from the external supplier?

Refer to the exhibit.

A company requires 2,000 units each of components X, Y and Z during the next period. All three components are made on the same machine which has a capacity of 26,000 hours for next period. No inventories are held.

Data for the three components are as follows:

In order to minimize cost, how many units of component X should be purchased from the external supplier?
A . None
B . 500
C . 1,500
D . 2,000

View Answer

Answer: B