Tech Systems manufactures an optical switch that it uses in its final product. Tech Systems incurred the following manufacturing costs when it produced 74.000 units last year: (Click the icon to view the manufacturing costs.) Another company has offered to sell Tech Systems the switch for $14.60 per unit. Tech Systems 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. 5 (Click the icon to view the outsourcing decision analysis.) Tech Systems needs 89,000 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 $245,000 to operating income, but none of the fixed costs will be avoidable. Should Tech Systems make or buy the switches? Show your analysis ..... Outsourcing decision analysis Complete the Best Use of Facilities Analysis. (Round unit costs to the nearest cent as needed. If a box is not used in the table, leave the box empty; do not enter a zero.) Tech Systems Best Use of Facilities Analysis Manufacturing costs Buy and Use Facilities for Direct materials $ 651,200 Make Other Product Direct labour. 111,000 Variable unit cost of obtaining the optical switches Variable overhead 170,200 Contribution margin of optical switches Fixed overhead 450.000 Total variable cost of obtaining the optical switches Total manufacturing cost for 74,000 units $ 1,382,400 Expected profit contribution from the other product Tech Systems Outsourcing Decision Make Buy Cost to Make Unit Unit Minus Cost to Buy $ 8.80 $ 8.80 Variable cost per unit: Direct materials Direct labour Variable overhead 1.50 1.50 2.30 Expected net cost of obtaining the optical switches Now determine whether Tech Systems should make or buy the switches. 2.30 (14.60) $ 14.60 Purchase price from outsider Print Done $ Variable cost per unit 12.60$ 14.60 $ (2.00) Tech Systems should outsource the switches and use the facilities to manufacture the other product. Print Done Choose from any list or enter any number in the input fields and then continue to the next question. Time Remaining: 02:41:49 Nex I 19C Mostly cloudy [x ENG 7:18 PM 8/16/2021