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BestSystems manufactures an optical switch that it uses in its final product. BestSystems incurred the following manufacturing costs when it produced 74,000 units last year:

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BestSystems manufactures an optical switch that it uses in its final product. BestSystems incurred the following manufacturing costs when it produced 74,000 units last year: (Click the icon to view the manufacturing costs.) Read the reguitements: BestSystems does not yet know how many switches it will need this year, however, another company has offered to sell BestSystems the switch for $14.50 per unit. If BestSystems buys the switch from the outside supplec, the manufacturing facilies that will be ide cannot be used for any other purpose. yet none of the fixed costs are avoidable Requirement 1. Given the same cost structure, should BestSystems make or buy the switch? Show your analysis. Complete an incremental analysis to show whether BestSystems should make or buy the switch. (Enter a " 0 for any zero amounts. Round amounts to the nearest cent. Use a minus sign or parentheses when the cost to buy exceeds the cost to make). Data table 1. Given the same cest structure, should BestSystems make or buy the switch? Show your analysis. 2. Now, assume that BestSystems can avoid $104,000 of fixed costs a year by outsourcing production. In add tion, because sales are increasing. BestSystems needs 79,000 switches a year rather than 74,000 switches. What should the company do now? 3. Given the last scenario, what is the most BesiSystems would be willing to pay to outsource the switches

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