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Laser Systems manufactures an optical switch that it uses in its final product. Another company has offered to sell Laser Systems the switch for $20.00 per unit. None of Laser's fixed costs are avoidable. E: (Click the icon to view the outsourcing decision.) Laser Systems needs 78,000 optical switches. By outsourcing them, Laser Systems can use its idle facilities to manufacture another product that will contribute $221,000 to operating income. Read the requirements. Data Table Requirement 1. Identify the expected net costs that Laser Systems will incur to acquire 78,000 switches under three alternative plans. Outsource switches Make Outsource Make new Facilities Difference Switch costs Make Idle product optical switch optical switch (Make-Outsource) Variable costs: Variable costs: Direct materials $ 7.00 $ Direct materials 7.00 546000 195000 Direct labor 2.50 Direct labor 2.50 Variable overhead 9.00 702000 Variable manufacturing overhead 9.00 (20.00) 20.00 Purchase cost 1560000 Purchase price from outsider 1560000 (221000) 18.50 $ 20.00 $ (1.50) Expected profit contribution from the other product Differential cost per unit 1443000 1560000 Total expected net cost of the optical switches 1339000 Print Done Requirement 2. Which plan makes the best use of Laser System's facilities? Support your answer. Laser Systems should outsource the optical switches and use the facilities to manufacture the other product because this plan results in the lowest expected net cost of obtaining the optical switches However, Laser Systems should also consider qualitative factors such as quality, certainty of on-time deliveries, and certainty of future prices matching the quoted price