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Eclipse Systems manufactures an optical switch that it uses in its final product. The switch has the following manufacturing costs per unit: (Click the icon
Eclipse 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.) i (Click the icon to view additional information.) Prepare an outsourcing analysis to determine whether Eclipse Systems should make or buy the switch. (For their tsourcing exceeds the cost of making the switches in-house.) - Data table Make Outsource Difference Direct materials $ 6.00 optical switch optical switch (Make-Outsource) Direct labor 4.50 Variable costs Variable overhead 5.00 6.00 Direct materials Fixed overhead Direct labor $ 21.50 Manufacturing product cost Variable overhead Purchase price from outsider | Total differential cost per unit More info Decision: Another company has offered to sell Eclipse Systems the switch for $17.00 per unit. If Eclipse 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 Done
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