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WorldSystems manufactures an optical switch that it uses in its final product. WorldSystems incurred the following manufacturing costs when it produced 72,000 units last
WorldSystems manufactures an optical switch that it uses in its final product. WorldSystems incurred the following manufacturing costs when it produced 72,000 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 $13.50 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 "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.) WorldSystems Incremental Analysis for Outsourcing Decision Variable cost per unit: Total variable cost per unit Make Unit Buy Unit Difference
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