Sensor Systems manufactures an optical switch that it uses in its final product. Another company has offered to sell Sensor Systems the switch for $12.50 per unit. None of Sensor's fixed costs are avoidable. (Click the icon to view the outsourcing decision.) Sensor Systems needs 85,000 optical switches. By outsourcing them, Sensor Systems can use its idle facilities to manufacture another product that will contribute $250,000 to operating income. Read the requirements. Requirement 1. Identify the expected net costs that Sensor Systems will incur to acquire 85,000 switches under three alternative plans. Outsource switches Switch costs Variable costs: Direct materials Direct labor Variable manufacturing overhead Purchase cost Expected profit contribution from the other product Total expected net cost of the optical switches Facilities Make Idle $ 510,000 170,000 255,000 Make new product