Homework: Chapter 8 Homework Save Score: 0 of 1 pt 5 of 7 (6 complete) HW Score: 80%, 8 of 10 pts X E8-28A (similar to) s Question Help GlobalSystems manufactures an optical switch that it uses in its final product. GlobalSystems incurred the following manufacturing costs when it produced 74,000 units last year: (Click the icon to view the manufacturing costs.) GlobalSystems does not yet know how many switches it will need this year; however, another company has offered to sell GlobalSystems the switch for $10.00 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. Read the requirements 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 Make Buy Unit Unit Difference Variable cost per unit: Direct materials Direct labor Variable overhead Purchase price from outsider Total variable cost per unit Choose from any list or enter any number in the input fields and then click Check Answer. ? parts remaining Clear All Check Answer - X i Data Table Direct materials 666,000 Direct labor 74,000 Variable MOH 222,000 481,000 Fixed MOH $ 1,443,000 Total manufacturing cost for 74,000 units Print Done i x Requirements - 1. Given the same cost structure, should GlobalSystems make or buy the switch? Show your analysis. 2. Now, assume that GlobalSystems can avoid $97,000 of fixed costs a year by outsourcing production. In addition, because sales are increasing, GlobalSystems needs 79,000 switches a year rather than 74,000 switches. What should the company do now? 3. Given the last scenario, what is the most GlobalSystems would be willing to pay to outsource the switches? Print Done