RootSystems manufactures an optical switch that it uses in its final product. RootSystems incurred the following manufacturing costs when it produced 68,000 units last year: (Click the icon to view the manufacturing costs.) Read the requirements. RootSystems does not yet know how many switches it will need this year, however, another company has offered to sell RootSystems the switch for $15.50 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. 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 make.) RootSystems Incremental Analysis for Outsourcing Decision Variable cost per unit: Total variable cost per unit Make Unit Buy Unit Difference Requirements Data table sasandhanan.uhan the coat in bus avsende the sack to - A B 1 Direct materials 680,000 2 Direct labor 68,000 3 Variable MOH 204,000 4 Fixed MOH 408,000 5 Total manufacturing cost for 68,000 units S 1,360,000 1. Given the same cost structure, should RootSystems make or buy the switch? Show your analysis. 2. Now, assume that RootSystems can avoid $97,000 of fixed costs a year by outsourcing production. In addition, because sales are increasing, RootSystems needs 73,000 switches a year rather than 68,000 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