Cool Systems manufactures an optical switch that it uses in its final product. Another company has offered to sell Cool Systems the switch for $21.50 per unit. None of Cool's fixed costs are avoidable EB (Click the icon to view the outsourcing decision.) Cool Systems needs 85,000 optical switches. By outsourcing them, Cool Systems can use its idle facilities to manufacture another product that will contribute $216,000 to operating income Read the requirements Requirement 1. Identify the expected net costs that Cool Systems will incur to acquire 85,000 switches u Data Table Outsource switches Facilities Make new Switch costs Make Idle product Variable costs: Variable costs: Direct materials 12.00 12.00 Direct materials Direct labor 4.00 4.00 Direct labor ariable overhead 8.00 8.00 Variable manufacturing overhead 21.50 (21.50) Purchase price from outsider Purchase cost 24.00 $ 21.50 $ 2.50 Differential cost per unit Expected profit contribution from the other product Total expected net cost of the optical switches Print Done Requirement 2. Which plan makes the best use of Cool System's facilities? Support your answer. Cool Systems should Vbecause this plan results in the lowest and However, Cool Systems should also consider qualitative factors such as Cool Systems manufactures an optical switch that it uses in its final product. Another company has offered to sell Cool Systems the switch for $21.50 per unit. None of Cool's fixed costs are avoidable EB (Click the icon to view the outsourcing decision.) Cool Systems needs 85,000 optical switches. By outsourcing them, Cool Systems can use its idle facilities to manufacture another product that will contribute $216,000 to operating income Read the requirements Requirement 1. Identify the expected net costs that Cool Systems will incur to acquire 85,000 switches u Data Table Outsource switches Facilities Make new Switch costs Make Idle product Variable costs: Variable costs: Direct materials 12.00 12.00 Direct materials Direct labor 4.00 4.00 Direct labor ariable overhead 8.00 8.00 Variable manufacturing overhead 21.50 (21.50) Purchase price from outsider Purchase cost 24.00 $ 21.50 $ 2.50 Differential cost per unit Expected profit contribution from the other product Total expected net cost of the optical switches Print Done Requirement 2. Which plan makes the best use of Cool System's facilities? Support your answer. Cool Systems should Vbecause this plan results in the lowest and However, Cool Systems should also consider qualitative factors such as