E8-28A Make-or-buy product component (Learning Objective 6) InteliSystems manufactures an optical switch that it uses in its final produ incurred the following manufacturing costs when it produced 70,000 unite product. InteliSystems 0.000 units last year: 1 Direct materials 2 Direct labor 3 Variable MOH 4 Fixed MOH 5 Total manufacturing cost for 70,000 units 560,000 105,000 70,000 455,000 1,190,000 $ InteliSystems does not yet know how many switches it will need this year: hou ever, another company has offered to sell InteliSystems the switch for $8.50 per If InteliSystems 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. Requirements 1. Given the same cost structure, should InteliSystems make or buy the switch? Show your analysis. 2. Now, assume that InteliSystems can avoid $105,000 of fixed costs a year by outsourc- ing production. In addition, because sales are increasing, InteliSystems needs 75,000 switches a year rather than 70,000 switches. What should the company do now? 3. Given the last scenario, what is the most inteliSystems would be willing to pay to out source the switches