Picаchо Pаrty Plаnners (Picachо) оffers small to medium-scale local event planning services, including day-of set-up, tear-down, and catering. Each event on average requires food for 100 attendees that Picacho can either make in-house or purchase from a third-party supplier at $7,500 per event. Current demand averages 50 events annually. If Picacho does not outsource food preparation, commercial kitchen space with all necessary equipment included will need to be leased costing $86,000 per year. A new chef and kitchen staff will also have to be hired, representing cumulative salaries and benefits of $220,000 per year. Additional incremental cost information to prepare meals to meet average event demand internally is as follows: Part III. Question 2: Based on the quantitative information provided, should Picacho outsource preparation of meals or prepare them internally to meet average event demand? Select one answer.
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