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table [ [ Data table,Data table ] , [ , A , B , TechSystems ] , [ 1 , Direct materials,$ , 7
tableData table,Data tableABTechSystemsDirect materials,$Incremental Analysis for Outsourcing DecisionDirect labor,
tableMakeUnitBuy,DifferenceVariable MOH,UnitFixed MOH,Variable cost per unit:Total manufacturing cost for units,$Direct materials,$$$tableDirect laborVariable overheadtabletabletabletablePurchase price from outsiderVariable cost per unittabletabletabletabletabletable$$ TechSystems manufactures an optical switch that it uses in its final product. TechSystems
incurred the following manufacturing costs when it produced units last year:
Click the icon to view the manufacturing costs.
Another company has offered to sell TechSystems the switch for $ per unit. If
TechSystems buys the switch from the outside supplier, none of the fixed costs are avoidable.
The company prepared an outsourcing decision analysis to show the cost per unit of making the
switches versus the cost per unit of buying outsourcing the switches.
Click the icon to view the outsourcing decision analysis.
TechSystems needs optical switches next year assume same relevant range
By outsourcing them, TechSystems can use its idle facilities to manufacture another
product that will contribute $ to operating income, but none of the fixed costs will
be avoidable. Should TechSystems make or buy the switches? Show your analysis.
Complete the Best Use of Facilities Analysis. Enter a for any zero amounts.
TechSystems
Best Use of Facilities Analysis
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