Systems manufactures an optical switch that it uses in its final product. The switch has the following manufacturing costs per unit:

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Prepare an outsourcing analysis to determine whether

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Systems should make or buy the switch. (For the Difference column, use a minus sign or parentheses only when the cost of outsourcing exceeds the cost of making the switches in-house.)

Direct materials

$10.00

Direct labor

4.50

Variable overhead

8.00

Fixed overhead

8.50

Manufacturing product cost

$31.00