BestSystems manufactures an optical switch that it uses in its final product. s incurred the BestSystems does not yet know how many switches it will need this year; however, another company has offered to sell BestSystems the switch for $12.00 per unit. If BestSystems buys the switch from the outside supplier, the manufacturing facilities that will be idle cannot be used for any other purpose, yet none of the fixed costs are avoidable following manufacturing costs when it produced 73,000 units last year EEE (Click the icon to view the manufacturing costs.) Read the requirements. 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 "o" 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 Incremental Analysis for Outsourcing Decision Make Buy Direct materials Direct labor Variable MOH Fixed MOH Total manufacturing cost for 73,000 units $ 730,000 73,000 219,000 11,000 $ 1.533,000 Unit Unit Variable cost per unit: Direct labor Direct materials Fixed overhead Purchase price from outsider Sales price Variable overhead Print Done in the input fields and then click Check Answer. BestSystems manufactures an optical switch that it uses in its final product. BestSystems incurred the BestSystems does not yet know how many switches it will need this year; however, another company has offered to sell BestSystems the switch for $12.00 per unit. If BestSystems buys the switch from the outside supplier, the manufacturing facilities that will be idle cannot be used for any other purpose, yet none of the fixed costs are avoidable following manufacturing costs when it produced 73,000 units last year: (Click the icon to view the manufacturing costs.) Read the requirements. 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 "O" 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 Make Unit Requirements Buy 1. Given the same cost structure, should BestSystems make or buy the switch? Unit Difference Show your analysis. Variable cost per unit 2. Now, assume that BestSystems can avoid $95,000 of fixed costs a year by outsourcing production. In addition, because sales are increasing. BestSystems needs 78,000 switches a year rather than 73,000 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? Total variable cost per unit Print Done Choose from any list or enter any number in the input fields and then click Check Answer. Clear AI Check Answer remaining
