Cool Systems manufactures an optical switch that it uses in its final product. Cool Systems incurred the following manufacturing costs when it produced 77,000 units last year. (Click the icon to view the manufacturing costs.) Cool Systems does not yet know how many switches it will need this year, however, another company has offered to sell Cool Systems the switch for $15.30 per unit If Cool Systems buys the switch from the outside supplier, the manufacturing facilities that become idle cannot be used for any other purpose, yet none of the fixed costs are avoidable. Requirements Requirement 1. Given the same cost structure, should Cool Systems make or buy the switch? Show your analysis. Complete an incremental analysis to show whether Cool Systems should make or buy the switch. (Round your answers to the nearest cent. All boxes in the Cost to Make Minus Cost to Buy column should have a value entered.) Cool Systems Outsourcing Decision Make Unit Buy Unit Cost to Make Minus Cost to Buy Variable cost per unit: Direct materials Direct labour Variable overhead Purchase price from outsider Total variable cost per unit Manufacturing costs Direct materials Direct labour. $ 677,600 146,300 Variable overhead. 215,600 465,000 Fixed overhead. $ 1,504,500 Total manufacturing cost for 77,000 units Print Done 1. Given the same cost structure, should Cool Systems make or buy the switch? Show your analysis. 2. Now, assume that Cool Systems can avoid $84,000 of fixed costs a year by outsourcing production. In addition, because sales are increasing, Cool Systems needs 85,000 switches a year rather than 77,000. What should Cool Systems do now? 3. Given the last scenario, what is the most Cool Systems would be willing to pay to outsource the switches? Print Done