Root Systems manufactures an optical switch that it uses in its final product. Another company has offered to sell Root Systems the switch for $15.50 per unit. None of Root's fixed costs are avoidable. (Click the icon to view the outsourcing decision.) Root Systems needs 80,000 optical switches. By outsourcing them, Root Systems can use its idle facilities to manufacture another product that will contribute $219,000 to operating income. Read the requirements. Requirement 1. Identify the expected net costs that Root Systems will incur to acquire 80,000 switches under three alternative plans. Switch costs 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 Outsource switches Facilities Make Idle Make new product Requirements C Data table Make Outsource Difference optical switch optical switch (Make-Outsource) Variable costs: Direct materials $ Direct labor 8.00 3.00 $ 8.00 3.00 Variable overhead 2.00 2.00 $ 15.50 Purchase price from outsider (15.50) $ 13.00 $ 15.50 $ (2.50) Differential cost per unit 1. Identify the expected net costs that Root Systems will incur to acquire 80,000 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 Root System's facilities? Support your answer. Print Done Print Done