GlobalSystems manufactures an optical switch that it uses in its final product. GlobalSystems incurred the following manufacturing costs when it produced $72,000$ 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 $$10\mathrm{.}50$ 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 avoldable.

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

GlobalSystems

Incremental Analysis for Outsourcing Decision

Data table

$\backslash$table$[[,$A$,,$B$],[1,$Direct materials,$$,648,000],[2,$Direct labor,,$144,000],[3,$Variable MOH,,$216,000],[4,$Fixed MOH,,$468,000],[5,$Total manufacturing cost for $72,000$ units,$$,1,476,000$