E8-30A (similar to) Question Help BestSystems manufactures an optical switch that it uses in its final product. BestSystems incurred the following manufacturing costs when it produced 71,000 units last year: (Click the icon to view the manufacturing costs.) BestSystems does not yet know how many switches it will need this year; however, another company has offered to sell BestSystems the switch for $11.50 per unit. If BestSystems 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. Read the requirements. Requirement 1. Given the same cost structure, should BestSystems make or buy the switch? Show your analysis. Complete an incremental analysis to show whether BestSystems should make or buy the switch. (Enter a "0" for any zero amounts. Round amounts to the nearest cent. Use a minus sign or parentheses when the cost to buy exceeds the cost to make.) BestSystems Data Table Incremental Analysis for Outsourcing Decision Make Buy Unit Unit Difference . B Variable cost per unit: 1 Direct materials $ 710,000 2 Direct labor 71,000 3 Variable MOH 213,000 4 Fixed MOH 426,000 $ 5 Total manufacturing cost for 71,000 units 1,420,000 Total variable cost per unit Print Done Choose from any list or enter any number in the input fields and then click Check Answer. X Requirements 1. Given the same cost structure, should BestSystems make or buy the switch? Show your analysis. 2. Now, assume that BestSystems can avoid $99,000 of fixed costs a year by outsourcing production. In addition, because sales are increasing, BestSystems needs 76,000 switches a year rather than 71,000 switches. What should the company do now? 3. Given the last scenario, what is the most BestSystems would be willing to pay to outsource the switches? Print Done