InteliSystems manufactures an optical switch that it InteliSystems does not yet know how many uses in its final product. InteliSystems incurred the switches it will need this year; however, another following manufacturing costs when it produced 70,000 company has offered to sell InteliSystems the units last year: switch for $8.50 per unit. If InteliSystems buys (Click the icon to view the manufacturing costs.) the switch from the outside supplier, the manufacturing facilities that will be idle cannot Read the requirements. be used for any other purpose, yet none of the fixed costs are avoidable. production. In addition, because sales are increasing, InteliSystems needs 75,000 switches a year rather than 70,000 switches. What should the company do now? Complete an outsourcing decision analysis assuming fixed costs can be avoided by outsourcing production and the number of units needed have increased Inteli Systems Outsourcing Decision Make Buy switches switches Variable cost per unit Units needed Total variable costs Fixed costs Total relevant costsX Data table A B 1 Direct materials 560,000 2 Direct labor 105,000 3 Variable MOH 70,000 4 Fixed MOH 455,000 5 Total manufacturing cost for 70,000 units $ 1, 190,000Requirements 1. Given the same cost structure, should InteliSystems make or buy the switch? Show your analysis. 2. Now, assume that InteliSystems can avoid $105,000 of fixed costs a year by outsourcing production. In addition, because sales are increasing, InteliSystems 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 InteliSystems would be willing to pay to outsource the switches