Homework: Ch 8 HW Score: 0 of 2 pts 5 of 6 (5 complete) X E8-31A (similar to) WorldSystems manufactures an optical switch that it uses in its final product. WorldSystems (Click the icon to view the outsourcing deci incurred the following manufacturing costs when it produced 74,000 units last year. Click the icon to view the manufacturing costs.) WorldSystems needs 81,000 optical switches Another company has offered to sell Worldsystems the switch for $15.00 per unit. If outsourcing them, WorldSystems can use its id WorldSystems buys the switch from the outside supplier, none of the fixed costs are that will contribute $218,000 to operating incom ayoldable. The company prepared an outsourcing decision analysis to show the cost per unit avoidable. Should Worldsystems make or buy of making the switches versus the cost per unit of buying (outsourcing) the switches. Best Use of Facilities Analysis Buy and Use Facilities for Other Make Product Number of optical switches Total variable cost of obtaining the optical switches Expected net cost of obtaining the optical switches Choose from any list or enter any number in the input fields and then click Check Answer, 1 part romaining Clear All (Click the icon to view the outsourcing decision analysis.) WorldSystems needs 81,000 optical switches next year (assume same relevant range). By outsourcing them, WorldSystems can use its idle facilities to manufacture another product that will contribute $218,000 to operating income, but none of the fixed costs will be avoidable. Should WorldSystems make or buy the switches? Show your analysis. hit w se its ic X g incor or buy - i Data Table ill A B 1 Direct materials $ 592,000 2 Direct labor 74,000 3 Variable MOH 222,000 4 Fixed MOH 481,000 $ 1,369,000 5 Total manufacturing cost for 74,000 units Print Done s analy Data Table - X ear (a ilities It none witche Difference WorldSystems Incremental Analysis for Outsourcing Decision Make Buy Unit Unit Variable cost per unit: Direct materials 8.00 $ 0.00 $ Direct labor 1.00 0.00 Variable overhead 3.00 0.00 0.00 15.00 Purchase price from outsider $ 12.00 $ 15.00 $ Variable cost per unit sh 8.00 1.00 Rica 3.00 (15.00) (3.00) tica Print Done um