Answered step by step
Verified Expert Solution
Question
1 Approved Answer
please complete all visisble format upvote BestSystems manufactures an optical switch that it uses in its final product, BestSystems incurred the following manufacturing costs when
please complete all visisble format upvote
BestSystems manufactures an optical switch that it uses in its final product, BestSystems incurred the following manufacturing costs when it produced 73,000 units last year Click the icon to view the manufacturing costs.) Another company has offered to sell Best Systems the switch for $11.00 per unit. If BestSystems 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 switches Click the icon to view the outsourcing decision analysis.) BestSystems needs 84.000 optical switches next year (assume same relevant range). By outsourcing them, BestSystems can use its idie facilities to manufacture another product that will contribute $110,000 to operating income, but none of the fixed costs will be avoidable. Should BestSystems make or buy the switches? Show your analysis a Complete the Best Use of Facilities Analysis. (Enter a "O" for any zero amounts) BestSystems Best Use of Facilities Analysis Buy and Use Facilities for Other Make Product Total variable cost of obtaining the optical switches Expected not cost of obtaining the optical switches Data table B $ 1 Direct materials 2 Direct labor 730,000 109,500 219,000 474,500 3 Variable MOH 4 Fixed MOH 5 Total manufacturing cost for 73,000 units $ 1,533,000 Print Done Data table Difference BestSystems Incromental Analysis for Outsourcing Decision Make Buy Unit Unit Variable cont per unit: Direct materials 10.00 $ 0.00 $ Direct labor 1.50 0.00 Variable overhead 3.00 0.00 Purchase price from outsider 0.00 11.00 $ 14.50 $ 11.00 S Variable cost per unit 10.00 1.50 3.00 (11.00) 3.50 Print Done Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started