BestSystems manufactures an optical switch that it uses in its final product. BestSystems incurred the following manufacturing costs when it produced 65,000 units last year: (Click the icon to view the manufacturing costs.) Read the requirements. BestSystems does not yet know how many switches it will need this year; however, another company has offered to sell BestSystems the switch $13.50 per unit. If BestSystems buys the switch from the outside supplier, the manufacturing facilities that will be idle cannot be used for any othe 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.) BestSystems Incremental Analysis for Outsourcing Decision Data table Requirements Variable cost per unit: Total variable cost per unit Make Unit Buy Unit Difference A B 1 Direct materials $ 585,000 2 Direct labor 65,000 3 Variable MOH 130,000 4 Fixed MOH 422,500 5 Total manufacturing cost for 65,000 units 1,202,500 1. Given the same cost structure, should BestSystems make or buy the switch? Show your analysis. 2. Now, assume that BestSystems can avoid $100,000 of fixed costs a year by outsourcing production. In addition, because sales are increasing, BestSystems needs 70,000 switches a year rather than 65,000 switches. What should the company do now? 3. Given the last scenario, what is the most BestSystems would be willing to pay to outsource the switches?