Image Systems manufactures an optical switch that it uses in its final product. Another company has offered to sell Image Systems the switch for $16.50 per unit. None of Image's fixed costs are avoidable. E: (Click the icon to view the outsourcing decision.) Image Systems needs 80,000 optical switches. By outsourcing them, Image Systems can use its idle facilities to manufacture another product that will contribute $216,000 to operating income. Read the requirements Requirement 1. Identify the expected net costs that Image Systems will incur to acquire 80,000 switches under three alternative plans. Outsource switches Facilities Make new Switch costs Make Idle product - X Data Table Make Outsource Difference Variable costs: Direct materials Direct labor Variable manufacturing overhead Purchase cost Expected profit contribution from the other product optical switch optical switch (Make-Outsource) Variable costs: Direct materials $ 8.00 8.00 Direct labor 4.00 4.00 Total expected net cost of the optical switches Variable overhead 2.00 2.00 (16.50) $ 16.50 Purchase price from outsider 9 14.00 $ 16.50 $ (2.50) Differential cost per unit Requirements Print Done 1. Identify the expected net costs that Image Systems will incur to acquire 80,000 switches under three alternative plans: make the switches, buy the switches and leave facilities idle, buy the switches and use the idle facilities to make another product. 2. Which plan makes the best use of Image System's facilities? Support your answer. Print Done