\begin{tabular}{l|l} WorldSystems manufactures an optical switch that it uses in its final product. WorldSystems incurred the following manufacturing costs when it produced 74,000 units last & (Click the icon to view the outsourcing decision analysis.) \\ year: & WorldSystems needs 80,000 optical switches next year (assume same relevant range). By \\ (Click the icon to view the manufacturing costs.) & outsourcing them, WorldSystems can use its idle facilities to manufacture another product that will \\ Another company has offered to sell World Systems the \\ switch for \$17.00 per unit. If WorldSystems buys the switch \\ from the outside supplier, none of the fixed costs are & contribute $120,000 to operating income, but none \\ avoidable. The company prepared an outsourcing decision & of the fixed costs will be avoidable. Should \\ analysis to show the cost per unit of making the switches & WorldSystems make or buy the switches? Show \\ versus the cost per unit of buying (outsourcing) the & your analysis. \\ switches. \end{tabular} Expected profit contribution from the other product Expected sales price of the other product Fixed unit cost of obtaining the optical switches Variable unit cost of obtaining the optical switches Outsource the optical switches and use the facilities to manufacture the other product. Make the optical switches. Print Done WorldSystems Print Done Buy and Use Facilities for Other Make Product Total variable cost of obtaining the optical switches Expected net cost of obtaining the optical switches Decision