Vista Company manufactures electronic equipment. It currently purchases the special switches used in each of its products from an outside supplier. The supplier charges Vista $7.90 per switch. Vista's CEO is considering purchasing either machine A or machine B so the company can manufacture its own switches. The projected data are as follows.
Machine A Machine B Annual fixed costs $1,096,750 $1,501,875 Variable cost per switch 2.55 1.15 Required:
1. For each machine, what is the minimum number of switches that Vista must make annually for total costs to equal outside purchase cost?