InteliSystems manufactures an optical switch that it uses in its final product. InteliSystems incurred the following manufacturing costs when it produced 70,000 units last year:

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

XE8-28A (book/static) is Question Help InteliSystems manufactures an optical switch that it uses in its final product InteliSystems incurred the following manufacturing costs when it produced 70,000 units last year: (Click the icon to view the manufacturing costs.) InteliSystems does not yet know how many switches it will need this year however, another company has offered to sell InteliSystems the switch for $8.50 per unit. If InteliSystems 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 InteliSystems make or buy the switch? Show your analysis. Complete an incremental analysis to show whether InteliSystems should make or buy the switch. (Enter a "O" 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.) InteliSystems Incremental Analysis for Outsourcing Decision Make Buy Unit Unit Difference Variable cost per unit: Direct materials Direct labor 10 $ Variable overhead 0.00 0.00 0.00 8.50 8.50 $ 31 0.00 10.50 $ Purchase price from outsider (8.50) 2.00 Total variable cost per unit $ Choose from any list or enter any number in the input fields and then click Check Answer. 5 parts Clear All Check Answer remaining i Data Table Direct materials $ 560,000 105,000 Direct labor Variable MOH 70,000 455,000 Fixed MOH $ 1,190,000 Total manufacturing cost for 70,000 units Print Done