RootSystems manufactures an optical switch that it uses in its final product. RootSystems incurred the following manufacturing costs when it produced 70.000 units last year: (Click the icon to view the manufacturing costs.) RootSystems does not yet know how many switches it will need this year; however, another company has offered to sell RootSystems the switch for $16.00 per unit. If RootSystems buys the switch from the outside supplier, the manufacturing facilities that will be idle cannot be used for any other purpose, yet none of the fixed costs are avoidable. Read the requirements Requirement 1. Given the same cost structure, should RootSystems make or buy the switch? Show your analysis. Complete an incremental analysis to show whether RootSystems should make or buy the switch. (Enter a "O" for any zero amounts. Round amounts to the nearest cent. Use a minus sign or parentheses when the cost to buy exceeds the cost to make.) Data Table RootSystems Incremental Analysis for Outsourcing Decision Make Buy Unit Unit Variable cost per unit: Difference A B $ 1 Direct materials 2 Direct labor 3 Variable MOH 630.000 175,000 210,000 455,000 4 Fixed MOH 1,470.000 Total variable cost per unit 5 Total manufacturing cost for 70,000 units Print Done Choose from any list or enter any number in the input fields and then click Check Answer. i X Requirements 1. Given the same cost structure, should RootSystems make or buy the switch? Show your analysis. 2. Now, assume that RootSystems can avoid $104,000 of fixed costs a year by outsourcing production. In addition, because sales are increasing, RootSystems needs 75,000 switches a year rather than 70,000 switches. What should the company do now? 3. Given the last scenario, what is the most RootSystems would be willing to pay to outsource the switches? Print Done