Requirement 3. Given the last scenario, what is the most InteliSystems 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 Cost if outsourcing switches Variable costs + Fixed costs Variable costs + Fixed costs Using the basic formula you determined above, solve for the outsourcing cost at which InteliSystems would be indifferent between outsourcing and making the switches. (Enter your per unit calculation to the nearest cent.) 14 InteliSystems 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 less than 14 per switch. InteliSystems manufactures an optical switch that it uses in its final product. InteliSystems incurred the following manufacturing costs when it produced 67,000 units last year: (Click the icon to view the manufacturing costs.) InteliSystems does not yet know how many switches it will need this year; however, another company has offered to sell InteliSystems the switch for $9.5 per unit. If InteliSystems buys the switch from the outside supplier, the manufacturing facilities that will be idle cannot be used for any other purpose, y none of the fixed costs are avoidable. Read the requirements. X Total variable costs Data Table - Fixed costs $ Total relevant costs A B Decision: Buy the optical switch becau 1 Direct materials $ 603,000 ant costs to buy the switches. Requirement 3. Given the last scenario, y 2 Direct labor 100,500 3 Variable MOH Begin by identifying the basic formula that 134,000 4. Fixed MOH 435,500 Cost if making switches Variable costs + Fixed costs 5 Total manufacturing cost for 67,000 units $ 1,273,000 etween outsourcing and making the Using the basic formula you determined al switches. (Enter your per unit calculation t Print Done InteliSystems would be indifferent betweeh outsourcing and making the switches in the outsourcing cost was per switch. Therefore, Systems will only be willing to outsource if the outsourcing cost is less than 14 per switch. Choose from any list or enter any number in the input fields and then click Check