Fiber Systems manufactures an optical switch that it uses in its final product. Another company has offered to sell Fiber Systems the switch for $17.00 per unit. None of Fiber Systems' fixed costs are avoidable. View the outsourcing decision. FiberSystems needs 78,000optical switches. By outsourcing them, FiberSystems can use its idle facilities to manufacture another product that will contribute $219,000 operating income. Read the requirements. Requirement 1. Identify the expected net costs that Fiber Systems will incur to acquire 78,000 switches under three alterative plans. Facilities Outsource switches Make new Switch costs Make Idle product Variable costs: Direct materials 10.00 3.00 Direct labor Variable manufacturing overhead Purchase cost 2.00 17.00 $ 1,326,000 (219,000) Expected profit contribution from the other product $ 1,170,000 $1,326,000 $ 1,107,000 Total expected net cost of the optical switches. hapter M10 Question 11, EM10-19 (similar to) Part 1 of 2 HW Score: 59.87%, = Points: 0 of 9 Fiber Systems manufactures an optical switch that it uses in its final product Another company has offered to sell Fiber System Systems View the FiberSys operating Read the Outsourcing Decision - X noth Make Outsource Difference optical switch optical switch (Make-Outsource) Variable costs: Require Direct materials ative Direct labor Variable overhead 10.00 3.00 2.00 10.00 3.00 2.00 17.00 Purchase price from outsider (17.00) Variable $ 15.00 $ 17.00 $ (2.00) Differential cost per unit Dire Dire Varia Print Done Purchas Expecte Total expected net cost of the optical switches. 1,170,000 1-107,000 View the outsourcing decision. iberSystems needs 78,000optical switches. By outsourcing them, FiberSystems can use its idle facilities to manufacture another product th peratin Read th Requirements equir ariabl Dir Dir Var 1. Identify the expected net costs that Fiber Systems will incur to acquire 78,000 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 Fiber Systems' facilities? Support your answer. tive plans. Print Done urchase cost 17.00 $ 1,326,000 xpected profit contribution from the other product (219,000) 1,170,000 $1,326,000 $ 1,107,000