WorldSystems manufactures an optical switch that it uses in its final product. WorldSystems incurred the following manufacturing costs when it produced 71,000 units last year: (Click the icon to view the manufacturing costs.) Read the requirements WorldSystems does not yet know how many switches it will need this year; however, another company has offered to sell WorldSystems the switch for $9.00 per unit. If WorldSystems 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 WorldSystems make or buy the switch? Show your analysis. Complete an incremental analysis to show whether WorldSystems should make or buy the switch. (Enter a "O" 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.) WorldSystems Incremental Analysis for Outsourcing Decision Variable cost per unit Total variable cost per unit Make Unit Buy Unit Difference Data table 1 Direct materials 2 Direct labor A $ B 568,000 71,000 3 Variable MOH 142,000 4 Fixed MOH 461,500 5 Total manufacturing cost for 71,000 units $ 1,242,500 Requirements 1. Given the same cost structure, should WorldSystems make or buy the switch? Show your analysis. 2. Now, assume that WorldSystems can avoid $105,000 of fixed costs a year by outsourcing production. In addition, because sales are increasing, WorldSystems needs 76,000 switches a year rather than 71,000 switches. What should the company do now? 3. Given the last scenario, what is the most WorldSystems would be willing to pay to outsource the switches? und Direct labor Direct materials Fixed overhead Purchase price from outsider Sales price Variable overhead ure, should V hether World the cost to dSystems for Outsou Make Unit