Data Table Direct materials Direct labor 7.00 1.00 4.00 8.00 Variable overhead Fixed overhead $ 20.00 Manufacturing product cost Print Print Done Done More Info Another company has offered to sell Opti Systems the switch for $13.50 per unit. If Opti Systems buys the switch from the outside supplier, the idle manufacturing facilities cannot be used for any other purpose, yet none of the fixed costs are avoidable. Print Print Done Done | Opti Systems manufactures an optical switch that it uses in its final product. The switch has the following manufacturing costs per unit: (Click the icon to view the costs.) IA (Click the icon to view additional information.) Prepare an outsourcing analysis to determine whether Opti Systems should make or buy the switch. (For the Difference column, use a minus sign or parentheses only when the cost of outsourcing exceeds the cost of making the switches in-house.) Make Outsource Difference optical switch optical switch (Make-Outsource) Variable costs: Direct materials Direct labor Variable overhead Purchase price from outsider Total differential cost per unit Decision: Data Table Edna Fashions Income Statement For the Quarter Ended September 30, 2018 Department Men's Women's Accessories Total Net Sales Revenue $ 101,000 $ 65,000 59,000 $ 35,000 102,000 $ 91,000 262,000 191,000 Variable Costs Contribution Margin 36,000 27,000 24,000 19,000 11,000 29,000 71,000 75,000 Fixed Costs $ 9,000 $ 5,000 $ (4,000) Operating Income (Loss) (18,000) $ Print Done More Info Assume that the fixed costs assigned to each department include only direct fixed costs of the department: Salary of the department's manager Cost of advertising directly related to that department Print Done Edna Fashions operates three departments: Men's, Women's, and Accessories. Departmental operating income data for the third quarter of 2018 are as follows: (Click the icon to view the data.) @ (Click the icon to view additional information.) If Edna Fashions drops a department, it will not incur these fixed costs. Under these circumstances, should Edna Fashions drop any of the departments? Give your reasoning. Begin by completing the following analysis to determine the increase or decrease in operating income from dropping the Accessories Department, the only Department showing an operating loss this quarter. (Enter decreases to profits with a parentheses or minus sign.) Edna Fashions Analysis of Dropping the Accessories Department Expected decrease in revenues Expected decrease in costs: Expected decrease in variable costs Expected decrease in fixed costs Expected decrease in total costs in operating me Under these circumstances, should Edna Fashions drop any of the departments? Give your reasoning. UI ZUTU ale as IUNIUWS. (Click the icon to view the data.) (Click the icon to view additional information.) If Edna Fashions drops a department, it will not incur these fixed costs. Under these circumstances, should Edna Fashions drop any of th departments? Give your reasoning. Analysis of Dropping the Accessories Department Expected decrease in revenues Expected decrease in costs: Expected decrease in variable costs Expected decrease in fixed costs Expected decrease in total costs in operating income Under these circumstances, should Edna Fashions drop any of the departments? Give your reasoning. Decision: Edna Fashions because relevent expenses are greater than the revenues which will result in an increase in operating income if the department is dropped. revenues are greater than the relevant expenses which will result in a decrease in operating income if the department is dropped. revenues from each department exceed variable expenses from each department. Choose from any list or enter any number in the input fields and then continue to the next