TechSystems manufactures an optical switch that it uses in its final product. TechSystems incurred the following manufacturing costs when it produced 72,000 units last year: (Click the icon to view the manufacturing costs.) Read the requirements. TechSystems does not yet know how many switches it will need this year, however, another company has offered to sell TechSystems the switch for $13.00 per unit. If TechSystems 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 TechSystems make or buy the switch? Show your analysis. Complete an incremental analysis to show whether TechSystems 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.) Variable cost per unit: Tech Systems Incremental Analysis for Outsourcing Decision Make Buy Unit Unit Difference Data table A B 1 Direct materials $ 792,000 2 Direct labor 180,000 3 Variable MOH 216,000 4 Fixed MOH 396,000 5 Total manufacturing cost for 72,000 units $ 1,584,000 Print Done - X Requirements 1. Given the same cost structure, should TechSystems make or buy the switch? Show your analysis. 2. Now, assume that TechSystems can avoid $108,000 of fixed costs a year by outsourcing production. In addition, because sales are increasing, TechSystems needs 77,000 switches a year rather than 72,000 switches. What should the company do now? 3. Given the last scenario, what is the most TechSystems would be willing to pay to outsource the switches? Print Done -