GlobalSystems manufactures an optical switch that it uses in its final product. GlobalSystems incurred the following manufacturing costs when it produced $65,000$ units last year:

$($Click the icon to view the manufacturing costs.$)$

Read the requirements.

GlobalSystems does not yet know how many switches it will need this year, however, another company has offered to sell GlobalSystems the switch for $$13\mathrm{.}00$ per unit. If GlobalSystems buys the switch from the outside supplier, the manufacturing facilities that will be idle cannot be used for any other purpose, yet none of the fixed costs are avoidable.

Requirement $1.$ Given the same cost structure, should GlobalSystems make or buy the switch? Show your analysis.

Complete an incremental analysis to show whether GlobalSystems should make or buy the switch. $($Enter a $"0"$ for any zero amounts. Round amounts to the nearest cent. Use a minus sign or parentheses when the cost to buy exceeds the cost to make.$)$

GlobalSystems

Incremental Analysis for Outsourcing Decision

$\backslash$table$[[$Make$,$Buy,$],[$Unit$,$Unit,Difference$]]$

Variable cost per unit:

$$

$$

$$

$7$

Total variable cost per unit

Total variable cost per unit

Data table

$\backslash$table$[[,$A$,,$B$],[1,$Direct materials,$$,585,000],[2,$Direct labor,,$162,500],[3,$Variable MOH,,$195,000],[4,$Fixed MOH,,$357,500],[5,$Total manufacturing cost for $65,000$ units,s$,1,300,000$