Root Systems manufactures an optical switch that it uses in its final product. Another company has offered to sell Root Systems the switch for $19.50 per unit. Root Systems needs 80,000 optical switches. By outsourcing them, Root Systems can use its idle facilities to manufacture another product that will None of Root's fixed costs are avoidable. contribute $216,000 to operating income. (Click the icon to view the outsourcing decision.) Read the requirements. Requirement 1. Identify the expected net costs that Root Systems will incur to acquire 80,000 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 Requirement 2. Which plan makes the best use of Root System's facilities? Support your answer. Root Systems should because this plan results in the lowest However, Root Systems should also consider qualitative factors such as and - X Data table - X Make Outsource Difference Requirements optical switch optical switch (Make-Outsource) Variable costs: 1. Identify the expected net costs that Root Systems will incur to acquire 80,000 switches Direct materials $ 8.00 S 8.00 under three alternative plans: make the switches, buy the switches and leave facilities idle, 2.00 2.0 buy the switches and use the idle facilities to make another product. Direct labor 2. Which plan makes the best use of Root System's facilities? Support your answer. Variable overhead 8.00 8.00 Purchase price from outsider $ 19.50 19.50) 18.00 $ Differential cost per unit 19.50 $ (1.50) Print Done Print Done