2218_ACCT225_05 Question P E Homework: Chapter 8 Homework (GRADED) TechSystems manufactures an optical switch that it uses in its final product. TechSysterns incurred the following manufacturing costs when it produced 65,000 units last year. (Click the icon to view the manufacturing costs.) Another company has offered to sell TechSystems the switch for $15.50 per unit. If TechSystems buys the switch from the outside supplier, none of the fixed costs are avoidable. The company prepared an outsourcing decision analysis show the cost per unit of making the switches versus the cost per unit of buying (outsourcing) the switches. Complete the Best Use of Facilities Analysis. (Enter a "O" for any zero amounts.) TechSystems Best Use of Facilities Analysis Buy and Use Facilities for Other Product Make Total variable cost of obtaining the optical switches. Expected net cost of obtaining the optical switches 3-29A (sim... of 2 HW Score: 10.83%, 2.17 of 20 points O Points: 0 of 3 Save PE (Click the icon to view the outsourcing decision analysis.) Tech Systems needs 78,000 optical switches next year (assume same relevant range). By outsourcing them, TechSystems can use its idle facilities to manufacture another product that will contribute $110,000 to operating income, but none of the fixed costs will be avoidable. Should TechSystems make or buy the switches? Show your analysis echSystems buys the switch from outsourcing decision analysis to ourcing) the switches. income, but none of the fixed costs analysis. Data table A B 1 Direct materials $ 585,000 2 Direct labor 65,000 3 Variable MOH 195,000 4 Fixed MOH 455,000 us 1,300,000 5 Total manufacturing cost for 65,000 units Print Done TechSystems Incremental Analysis for Outsourcing Decision Make Buy Unit Unit Difference ble cost per unit: irect materials $ 9.00 $ 0.00 $ 9.00 irect labor 1.00 0.00 1.00 ariable overhead 3.00 0.00 3.00 (15.50) 0.00 15.50 urchase price from outsider $ 13.00 $ 15.50 $ (2.50) ariable cost per unit Print Done