TechSystems manufactures an optical switch that it uses in its final product. TechSystems incurred the following manufacturing costs when it produced 71,000 units last year: (Click the icon to view the manufacturing costs.) Another company has offered to sell TechSystems the switch for $18.50 per unit. If TechSystems buys the switch from the outside supplier, none of the fixed costs are avoidable. The company 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. (Click the icon to view the outsourcing decision analysis.) TechSystems needs 78,000 optical switches next year (assume same relevant range). By outsourcing them, TechSystems can use its idle facilities to manufacture another product that will contribute $220,000 to operating income, but none of the fixed costs will be avoidable. Should TechSystems make or buy the switches? Show your analysis. Complete the Best Use of Facilities Analysis. (Enter a "0" for any zero amounts.) Tech Systems Best Use of Facilities Analysis X Total variable cost of obtaining the optical switches Expected net cost of obtaining the optical switches Decision: Buy and Use Facilities for Other Make Product X Data table Data table A B Tech Systems Incremental Analysis for Outsourcing Decision Make Buy Unit Unit 1 Direct materials S 781,000 2 Direct labor 142,000 3 Variable MOH 213,000 Difference 4 Fixed MOH 390,500 Variable cost per unit: 5 Total manufacturing cost for 71,000 units $ 1,526,500 Direct materials $ 11.00 $ 0.00 $ Direct labor 2.00 0.00 11.00 2.00 Variable overhead 3.00 0.00 3.00 Purchase price from outsider 0.00 18.50 (18.50) Print Done $ 16.00 $ 18.50 $ Variable cost per unit (2.50) Print Done