Eyescape Systems manufactures an optical switch that it uses in its final product. Another company has offered to sell Eyescape Systems the switch for $18.50 per unit. None of Eyescape's fixed costs are avoidable. (Click the icon to view the outsourcing decision.) Requirement 1. Identify the expected net costs that Eyescape Systems will incur to acquire 82,000 switches under three alternative plans. Outsource switches Facilities Make new Make Idle product Switch costs Variable costs: Direct materials Direct labor $ 492,000 82,000 Variable manufacturing overhead Purchase cost Expected profit contribution from the other product 738,000 $ 1,517,000 $ 1,517,000 (217,000) $ 1,312,000 $ 1,517,000 $ 1,300,000 Total expected net cost of the optical switches Requirement 2. Which plan makes the best use of Eyescape System's facilities? Support your answer. Eyescape Systems should However, Eyescape Systems should also consider qualitative factors such as because this plan results in the lowest and Eyescape Systems needs 82,000 optical switches. By outsourcing them, Eyescape Systems can use its idle facilities to manufacture another product that will contribute $217,000 to operating income. Read the requirements. Data table Make Outsource Difference optical switch optical switch (Make-Outsource) Variable costs: Direct materials $ Direct labor 6.00 1.00 $ 6.00 1.00 Variable overhead 9.00 9.00 Purchase price from outsider $ $ 16.00 $ 18.50 18.50 $ (18.50) (2.50) Differential cost per unit Requirements Print Done 1. Identify the expected net costs that Eyescape Systems will incur to acquire 82,000 switches under three alternative plans: make the switches, buy the switches and leave facilities idle, buy the switches and use the idle facilities to make another product. 2. Which plan makes the best use of Eyescape System's facilities? Support your answer. Print Done