Need help

WorldSystems manufactures an optical switch that it uses in its final product. WorldSystems incurred the following manufacturing costs when it produced 72,000 units last year (Click the icon to view the manufacturing costs.) WorldSystems does not yet know how many switches it will need this year, however, another company has offered to sell WorldSystem $11.50 per unit. If World Systems buys the switch from the outside supplier, the manufacturing facilities that will be idle cannot be used f purpose, yet none of the fixed costs are avoidable. Read the requirements .. Requirement 1. Given the same cost structure, should WorldSystems make or buy the switch? Show your analysis. Complete an incremental analysis to show whether WorldSystems should make or buy the switch. (Enter a "0" for any zero amounts. Round amounts to the nearest cent. Use a minus sign or parentheses when the cost to buy exceeds the cost to make.) - X Data table - X Requirements Difference World Systems Incremental Analysis for Outsourcing Decision Make Buy Unit Unit Variable cost per unit: Direct materials $ 0.00 Direct labor 0.00 Variable overhead 0.00 Purchase price from outsider 0.00 11.50 A B 1 Direct materials $ 648,000 2 Direct labor 108.000 1. Given the same cost structure, should WorldSystems make or buy the switch? Show your analysis. 2. Now, assume that WorldSystems can avoid 599,000 of fixed costs a year by outsourcing production. In addition, because sales are increasing, WorldSystems needs 77,000 switches a year rather than 72,000 switches. What should the company do now? 3. Given the last scenario, what is the most WorldSystems would be willing to pay to outsource the switches? (11.50) 3 Variable MOH 216,000 $ 11.50 396,000 4 Fixed MOH Total variable cost per unit 5 Total manufacturing cost for 72,000 units $ 1,368,000 Print Done Print Done