(Click the icon to view the outsourcing decision analysis.) TechSysternis manufactures ar optical switch that it uses in its final product. TechSystems incurred the following manufacturing of (Click the ico - X Another company Data table the outside suppi show the cost pel A B Data table them, operating Show your IS Complete the Be! 1 Direct materials 2 Direct labor 3 Variable MOH 3 4 4 Fixed MOH 5 Total manufacturing cost for 71,000 units 781,000 142,000 213,000 TechSystems Incremental Analysis for Outsourcing Decision Make Buy Unit Unit Difference 390,500 $ 1,526,500 $ 11.00 S 0.00 $ 11.00 2.00 0.00 Variable cost per unit: Direct materials Direct labor Variable overhead Purchase price from outsider Variable cost per unit 3.00 0.00 18.50 2.00 3.00 (18.50) 0.00 Print Done $ 16.00 S 18.50 $ (2.50) Total variable cod Expected net cost of obtaining the optical switches Print Done Decision: TechSystems manufactures an optical switch that it uses in its final product. TechSysterns incurred the following manufacturing costs when it produced 71,000 units last year: (Click the icon to view the manufacturing costs.) Another company has offered to sell TechSystems the switch for $18.50 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 to show the cost per unit of making the switches versus the cost per unit of buying (outsourcing) the switches. (Click the icon to view the outsourcing decision analysis.) TechSystems neuds 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 $220,000 to operating income, but none of the fixed costs will be avoidable. Should TechSystems make or buy the switches? Show your analysis. 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 Make Product Total variable cost of obtaining the optical switches Expected net cost of obtaining the optical switches Decision: Best Use of Facilities Analysis Buy and Use Facilities for Other Make Product Total varia Make the optical switches. Outsource the optical switches and use the facilities to manufacture the other product. Expected Decision