WorldSystems manufactures an optical switch that it uses in its final product. WorldSystems incurred the following manufacturing costs when it produced 70,000 units last year. (Click the icon to view the manufacturing costs.) WorldSystems does not yet know how many switches it will need this year, however, another company has offered to sell WorldSystems the switch for $11.00 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. Read the requirements A Data Table Requirement 1. Given the same cost structure, should WorldSystems make or buy the switch? Show your analysis Complete an incremental analysis to show whether World Systems should make or buy the switch. (Enter a "O" for an make.) A B Theses when the cost to buy exceeds the cost to 1 Direct materials S 630,000 140,000 WorldSystems Incremental Analysis for Outsourcing Decision Make Buy 2 Direct labor 3 Variable MOH 210,000 385,000 4 Fixed MOH Unit Unit Difference S 5 Total manufacturing cost for 70,000 units 1,365,000 Variable cost per unit: 0 Requirements Total variable cost per unit 1. Given the same cost structure, should World Systems make or buy the switch? Show your analysis. 2. Now, assume that WorldSystems can avoid $95,000 of fixed costs a year by outsourcing production. In addition, because sales are increasing. WorldSystems needs 75,000 switches a year rather than 70,000 switches. What should the company do now? 3. Given the last scenario, what is the most World Systems would be willing to pay to outsource the switches? Choose from any list or enter any number in the input fields and then click Check Answer. ? 5 parts remaining Check Answer Print Done