Fibre Systems manufactures an optical switch that it uses in its final product. Fibre Systems incurred the following manufacturing costs when it produced 71,000 units last year: E (Click the icon to view the manufacturing costs.) Fibre Systems does not yet know how many switches it will need this year, however, another company has offered to sell Fibre Systems the switch for $11.10 per unit. If Fibre Systems buys the switch from the outside supplier, the manufacturing facilities that become idle cannot be used for any other purpose, yet none of the fixed costs are avoidable. Requirements Requirement 1. Given the same cost structure, should Fibre Systems make or buy the switch? Show your analysis. Complete an incremental analysis to show whether Fibre Systems should make or buy the switch. (Round your answers to the nearest cent. All boxes in the Cost to Make Minus Cost to Buy column should have a value entered.) - X Fibre Systems Outsourcing Decision Make Unit Buy Unit Requirements Manufacturing costs Cost to Make M Cost to Buy Variable cost per unit: Direct materials $ Direct materials Direct labour. Direct labour Variable overhead 1. Given the same cost structure, should Fibre Systems make or buy the switch? Show your analysis. 2. Now, assume that Fibre Systems can avoid $83,000 of fixed costs a year by outsourcing production. In addition, because sales are increasing, Fibre Systems needs 77,000 switches a year rather than 71,000. What should Fibre Systems do now? 3. Given the last scenario, what is the most Fibre Systems would be willing to pay to outsource the switches? 539,600 127,800 177,500 480,000 Variable overhead Fixed overhead. Purchase price from outsider $ 1,324,900 Total manufacturing cost for 71,000 units .. Total variable cost per unit Print Done Print Done