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Global Systems manufactures an optical switch that it uses in its final product Global Systems incurred the following manufacturing costs when it produced 79,000 units
Global Systems manufactures an optical switch that it uses in its final product Global Systems incurred the following manufacturing costs when it produced 79,000 units last year BE: (Click the icon to view the manufacturing costs.) Global Systems does not yet know how many switches it will need this year, however, another company has offered to sell Global Systems the switch for $14.80 per unit. If Global 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 Global Systems make or buy the switch? Show your analysis. Complete an incremental analysis to show whether Global 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.) Global Systems Outsourcing Decision Make Unit Buy Unit Cost to Make Minus Cost to Buy Manufacturing costs Variable cost per unit: Direct materials Direct materials. 695,200 126,400 Direct labour Direct labour. Variable overhead Variable overhead 221,200 465,000 Purchase price from outsider Fixed overhead $ Total manufacturing cost for 79,000 units 1,507 800 Planolebie lidon Cat mam hal
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