Global Systems manufactures an optical switch that it uses in its final product. Global systems incurred the following manufacturing costs when it produced 65,000 units last year Direct Materials Direct Labour Variable Overhead Fixed Overhead Total costs 585,000 162,500 195,000 455,000 1,397,500 Global systems does not know how many switches it will need this year, however another company has offered to sell Global Systems the switch for $13 per unit. If Global buys the switch from the outside supplier, the manufacturing facilities that become idle cannot be used for another purpose. None of the fixed costs are avoidable Requirement A (6 marks) Given the same cost structure as last year, should Global systems make or buy the switch? Requirement B.(10 marks) Now assume that Global can avoid $84,000 fixed costs by outsourcing production and that sales are increasing so the company now needs 70,000 switches. Should Global systems make or buy the switch? Complete an incremental analysis to calculate relevant costs. Requirement C(15 marks) Given the scenario in requirement 2, what is the highest price per unit that Global would be willing to pay to the outside supplier show all your workings. Show all your work. Pg. 3