^{Just need the last 3 blank ones please!}

Tech Systems manufactures an optical switch that it uses in its final product. Tech Systems incurred the following manufacturing costs when it produced 71,000 units last year: |(Click the icon to view the manufacturing costs.) Tech Systems does not yet know how many switches it will need this year; however, another company has offered to sell TechSystems the switch for $13.00 per unit. If TechSystems 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. - Data table Requirements Ivitch? Show your A B switch. (Enter 1 Direct materials $ 710,000 2 Direct labor 177,500 1. Given the same cost structure, should TechSystems make or buy the switch? Show your analysis. 2. Now, assume that TechSystems can avoid $105,000 of fixed costs a year by outsourcing production. In addition, because sales are increasing, Tech Systems needs 76,000 switches a year rather than 71,000 switches. What should the company do now? 3. Given the last scenario, what is the most Tech Systems would be willing to pay to outsource the switches? 3 Variable MOH 142,000 4 Fixed MOH 461,500 5 Total manufacturing cost for 71,000 units $ 1,491,000 Print Done ler Print Done Requirement 1. Given the same cost structure, should TechSystems make or buy the switch? Show your analysis. Complete an incremental analysis to show whether Tech Systems 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.) TechSystems Incremental Analysis for Outsourcing Decision Make Buy Unit Unit Difference Variable cost per unit: Direct materials $ 10.00 $ 0.00 $ 10.00 Direct labor 2.50 0.00 2.50 Variable overhead 2.00 0.00 2.00 Purchase price from outsider 0.00 13.00 (13.00) $ 14.50 $ 13.00 $ 1.50 Total variable cost per unit Requirement 2. Now, assume that TechSystems can avoid $105,000 of fixed costs a year by outsourcing production. In addition, because sales are increasing, Tech Systems needs 76,000 switches a year rather than 71,000 switches. What should the company do now? Complete an outsourcing decision analysis assuming fixed costs can be avoided by outsourcing production and the number of units needed have increased. TechSystems Outsourcing Decision Make Buy switches switches Variable cost per unit $ 14.50 $ 13.00 Units needed 76,000 76,000 Total variable costs 1,102,000 461,500 988,000 356,500 Fixed costs $ 1,563,500 $ 1,344,500 Total relevant costs Decision: Buy the optical switch because the total relevant costs to make the switches are greater than the total relevant costs to buy the switches. Requirement 3. Given the last scenario, what is the most TechSystems would be willing to pay to outsource the switches? Begin by identifying the basic formula that is used to determine the indifferent outsourcing cost per unit. Cost if making switches Variable costs + Fixed costs Cost if outsourcing switches Variable costs + Fixed costs Using the basic formula you determined above, solve for the outsourcing cost at which TechSystems would be indifferent between outsourcing and making the switches. (Enter your per unit calculation to the nearest cent.) TechSystems would be indifferent between outsourcing and making the switches if the outsourcing cost was per switch. Therefore, Systems will only be willing to outsource if the outsourcing cost is per switch hes are greater than the total relevant costs ng to payt 2S? cing cost p ing switche equal Fixed cos greater than TechSyst nt between less than outsourci is per sw