Tech Systems manufactures an optical switch that it uses in its final product. Another company has offered to sell Tech Systems

the switch for $$20\mathrm{.}50$ per unit. None of Tech's fixed costs are avoidable.

$($Click the icon to view the outsourcing decision.$)$

Requirement $1.$ Identify the expected net costs that Tech Systems will incur to acquire $84,000$ switches under three alternative plans.

Requirement $2.$ Which plan makes the best use of Tech System's facilities? Support your answer.

Tech Systems should

because this plan results in the lowest

However, Tech Systems should also consider qualitative factors such as

and

$.$

Tech Systems needs $84,000$ optical switches. By outsourcing them, Tech Systems can use its idle facilities to

manufacture another product that will contribute $$220,000$ to operating income.

Data table