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WorldSystems manufactures an optical switch that it uses in its final product. WorldSystems (Click the icon to view the outsourcing decision analysis.) incurred the following
WorldSystems manufactures an optical switch that it uses in its final product. WorldSystems (Click the icon to view the outsourcing decision analysis.) incurred the following manufacturing costs when it produced 70,000 units last year: (Click the icon to view the manufacturing costs.) WorldSystems needs 81,000 optical switches next year (assume same relevant range). Another company has offered to sell WorldSystems the switch for $15.50 per unit. If By outsourcing them, WorldSystems can use its idle facilities to manufacture another product that will contribute $140,000 to operating income, but none of the fixed costs will WorldSystems 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 be avoidable. Should WorldSystems make or buy the switches? Show your analysis. switches versus the cost per unit of buying (outsourcing) the switches. Complete the Best Use of Facilities Analysis. (Enter a "0" for any zero amounts.) Data table Data table
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