K Fiber Systems manufactures an optical switch that it uses in its final product. Another company has offered to sell Fiber Systems the switch for $12.00 per unit. None of Fiber's fixed costs are avoidable. (Click the icon to view the outsourcing decision.) wwwww Fiber Systems needs 82,000 optical switches. By outsourcing them, Fiber Systems can use its idle facilities to manufacture another product that will contribute $221.000 to operating income. Read the requirements Requirement 1. Identify the expected net costs that Fiber Systems will incur to acquire 82,000 switches under three alternative plans. Outsource switches Facilities Make new Switch costs Make Idle product Variable costs: Direct materials Direct labor Variable manufacturing overhead Purchase cost 574,000 123.000 164,000 984,000 $ 984,000 (221,000) 861,000 984,000 763.000 Expected profit contribution from the other product Total expected net cost of the optical switches Requirement 2. Which plan makes the best use of Fiber System's facilities? Support your answer. Fiber Systems should outsource the optical switches and use the facilities to manufacture the other product because this plan results in the lowest expected net cost of obtaining the optical switches However, Fiber Systems should also consider qualitative factors such as quality, caraishi of on time delivarian and certainty of future prices matching Data table Make Outsource Difference optical switch optical switch (Make-Outsource) Variable costs: Direct materials $ 7.00 7.00 Direct labor 1.50 1.50 Variable overhead 2.00 2.00 12.00 Purchase price from outsider (12.00) 10.50 $ 12.00 $ (1.50) Differential cost per unit Print Done