please answer exercises 28A and 29A. For 29A, refer back to 28A for information.

E8-28A Make-or-buy product component (Learning Objective 6) InteliSystems manufactures an optical switch that it uses in its final product. InteliSystems incurred the following manufacturing costs when it produced 70,000 units last year: 1 2 3 4 5 Direct materials Direct labor Variable MOH Fixed MOH Total manufacturing cost for 70,000 units 560,000 105,000 70,000 455,000 1,190,000 $ InteliSystems does not yet know how many switches it will need this year; how- ever, another company has offered to sell InteliSystems the switch for $8.50 per unit. If InteliSystems buys the switch from the outside supplier, the manufacturing facilities that will be idle cannot be used for any other purpose; yet none of the fixed costs are avoidable. Requirements 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 outsourc- ing 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 out- source the switches? E8-29A Make-or-buy decision with alternative use of facilities (Learning Objective 6) Refer to E8-28A. InteliSystems needs 79,000 optical switches next year (assume same relevant range). By outsourcing them, InteliSystems can use its idle facilities to manufac- ture another product that will contribute $140.000 to operating income, but none of the fixed costs will be avoidable. Should InteliSystems make or buy the switches? Show your analysis