uses in its final product. GlobalSystems incurred the following manufacturing costs when it Global Systems manufactures an optical switch that produced 69,000 units last year: E: (Click the icon to view the manufacturing costs.) GlobalSystems does not yet know how many switches it will need this year, however, another company has offered to sell GlobalSystems the switch for $14.00 per unit. If Global Systems 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. Read the requirements. Requirement 1. Given the same cost structure, should Global Systems make or buy the switch? Show your analysis. Complete an incremental analysis to show whether GlobalSystems 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.) Global Systems Incremental Analysis for Outsourcing Decision Requirements Data Table Make Buy Unit Unit Difference A B Variable cost per unit: 1 Direct materials $ 552,000 Direct materials 2 Direct labor Direct labor 69,000 1. Given the same cost structure, should Global Systems make or buy the switch? Show your analysis. 2. Now, assume that GlobalSystems can avoid $104,000 of fixed costs year by outsourcing production. In addition, because sales are increasing, GlobalSystems needs 74,000 switches a year rather than 69,000 switches. What should the company do now? 3. Given the last scenario, what is the most Global Systems would be willing to pay to outsource the switches? Variable overhead 3 Variable MOH 207,000 4 Fixed MOH 379,500 Purchase price from outsider 5 Total manufacturing cost for 69,000 units $ 1,207,500 Total variable cost per unit Print Done Print Done