m Spectra Systems manufactures an optical switch that it uses in its final product. The...
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m Spectra Systems manufactures an optical switch that it uses in its final product. The switch has the following manufacturing costs per unit: (Click the icon to view the costs.) (Click the icon to view additional information.) Prepare an outsourcing analysis to determine whether Spectra Systems should make or buy the switch. (For the Difference column, use a minus sign or parentheses only when the cost of outsourcing exceeds the cost of making the switches in-house.) Make Outsource optical switch Difference (Make-Outsource) optical switch Variable costs: Direct materials Direct labor Variable overhead Purchase price from outsider Total differential cost per unit ULT Data table EA $ 10.00 3.00 Direct materials Direct labor Variable overhead Fixed overhead 6.00 6.00 $ 25.00 Manufacturing product cost Recent More info Another company has offered to sell Spectra Systems the switch for $21.00 per unit. If Spectra Systems buys the switch from the outside supplier, the idle manufacturing facilities cannot be used for any other purpose, yet none of the fixed costs are avoidable
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