Question: Refer to E8-28A. InteliSystems needs 79,000 optical switches next year (assume same relevant range). By outsourcing them, InteliSystems can use its idle facilities to manufacture

Refer to E8-28A. InteliSystems needs 79,000 optical switches next year (assume same relevant range). By outsourcing them, InteliSystems can use its idle facilities to manufacture another product that will contribute $140,000 to operating income, but none of the fixed costs will be avoidable. Should InteliSystems make or buy the switches? Show your analysis.
E8-28A

1 Direct materials 2 Direct labor 560,000 3 Variable MOH 70,000 455,000 1,190,000 4 Fixed MOH 5 Total manufacturing cost for 70,000 units 6. %24 %24

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