RootSystems manufactures an optical switch that it uses in its final product. RootSystems incurred the following manufacturing costs when it produced 74,000 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 $10.50 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 "0" 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.) RootSystems Incremental Analysis for Outsourcing Decision Make Buy Unit Unit Difference Variable cost per unit: Total variable cost per unit Data Table A B 1 Direct materials $ 666,000 2 Direct labor 74,000 3 Variable MOH 148,000 4 Fixed MOH 444,000 5 Total manufacturing cost for 74,000 units $ 1,332,000 1. Given the same cost structure, should RootSystems make or buy the switch? Show your analysis. 2. Now, assume that RootSystems can avoid $105,000 of fixed costs a year by outsourcing production. In addition, because sales are increasing, RootSystems needs 79,000 switches a year rather than 74,000 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