Question: * 2 Parts * Tech Systems manufactures an optical switch that it uses in its final product. Another company has offered to sell Tech Systems

*2 Parts*
Tech Systems manufactures an optical switch that it uses in its final product. Another company has offered to sell Tech Systems the switch for $19.50 per unit. None of Tech
Systems' fixed costs are avoidable.
View the outsourcing decision.
Tech Systems needs 85,000 optical switches. By outsourcing them, Tech Systems can use its idle facilities to manufacture another product that will contribute $218,000 to
operating income.
Read the requirements.
Requirement 1. Identify the expected net costs that Tech Systems will incur to acquire 85,000 switches under three alternative plans.
Outsourcing Decision
Requirements
Identify the expected net costs that Tech Systems will incur to acquire 85,000 switches
under three alternative plans: make the switches, buy the switches and leave facilities idle,
buy the switches and use the idle facilities to make another product.
Which plan makes the best use of Tech Systems' facilities? Support your answer.
*2 Parts* Tech Systems manufactures an optical switch that it uses

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