Opti systems manufactures an optical switch it uses in its final product. Another company has offered to sell Opti systems the switch for $18.00 per unit. None of Optis fixed costs are avoidable.

Opti systems needs 83,000 optical switches. By outsourcing them, opti systems can use its idle facilities to manufacture another product that will contribute $250,000 to operating income

Idle product Requirements 1. Identify the expected net costs that Opti Systems will incur to acquire 83,000 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 Opti System's facilities? Support your answer. Print Done Data Table Make Outsource Difference optical switch optical switch (Make-Outsource) Variable costs: Direct materials 10.00 10.00 Direct labor 3.00 3.00 Var ad 2.00 $ 2.00 (18.00) 18.00 Purchase price from outsider $ 15.00 $ 18.00 $ (3.00) Differential cost per unit Print Done another Systems the switch for $18.00 per unit. None of Opti's fixed costs are avoidable. B Click the icon to view the outsourcing decision.) Read th Requirement 1. Identify the expected net costs that Opti Systems will incur to acquire 83,000 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 Expected profit contribution from the other product Total expected net cost of the optical switches