(Click the icon to view the outsourcing decision analysis.) TechSystems manufactures an optical switch that it uses in its final product. TechSystems incurred the following manufacturing costs when it produced 67,000 units last year: (Click the icon to view the manufacturing costs.) Another company has offered to sell Tech Systems the switch for $9.00 per unit. If Tech Systems buys the switch from the outside supplier, none of the fixed costs are avoidable. The company prepared an outsourcing decision analysis to show the cost per unit of making the switches versus the cost per unit of buying (outsourcing) the switches. Complete the Best Use of Facilities Analysis. (Enter a "0" for any zero amounts.) TechSystems needs 84,000 optical switches next year (assume same relevant range). By outsourcing them, Tech Systems can use its idle facilities to manufacture another product that will contribute $110,000 to operating income, but none of the fixed costs will be avoidable. Should Tech Systems make or buy the switches? Show your analysis. TechSystems Best Use of Facilities Analysis Buy and Use Facilities for Other Make Product Total variable cost of obtaining the optical switches Expected net cost of obtaining the optical switches Choose from any list or enter any number in the input fields and then click Check Answer. ? part remaining Clear All Check Answer A B 1 Direct materials $ 536,000 2 Direct labor 167,500 3 Variable MOH 134,000 4 Fixed MOH 469,000 $ 5 Total manufacturing cost for 67,000 units 1,306,500 TechSystems Incremental Analysis for Outsourcing Decision Make Buy Unit Unit Difference Variable cost per unit: Direct materials $ 8.00 $ 0.00 $ 8.00 Direct labor 2.50 0.00 2.50 Variable overhead 2.00 0.00 2.00 0.00 9.00 Purchase price from outsider (9.00) $ 12.50 $ 9.00 $ 3.50 Variable cost per unit 1 part remaining