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InteliSystems manufactures an optical switch that it uses in its final product. InteliSystems incurred the following manufacturing costs when it produced 6 9 , 0
InteliSystems manufactures an optical switch that it uses in its final product. InteliSystems incurred the following manufacturing costs when it produced units last year:
Click the icon to view the manufacturing costs.
Another company has offered to sell InteliSystems the switch for $ per unit. If InteliSystems buys the switch from the outside supplier, none of the fixed costs are avoidable. The company prepared an outsourcing decision analysis to show the cost per unit of making the switches versus the cost per unit of buying outsourcing the
Click the icon to view the outsourcing decision analysis.
InteliSystems needs optical switches next year assume same relevant range By outsourcing them, InteliSystems can use its idle facilities to manufacture another product that will contribute $ to operating income, but none of the fixed costs will be avoidable. Should InteliSystems make or buy the switches? Show your analysis.
Data table
Complete the Best Use of Facilities Analysis. Enter a for any zero amounts.
tabletableInteliSystemsIncremental Analysis for Outsourcing Decision
tableMakeUnitBuy,DifferenceUnitVariable cost per unit:Direct materials,$$$Direct labor,,Variable overhead,,tablePurchase price from outsiderVariable cost per unit
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