More Info Another company has offered to sell Best Systems the switch for $16.00 per...
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More Info Another company has offered to sell Best Systems the switch for $16.00 per unit. If Best 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. Print Done Best 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 Best 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 Difference optical switch optical switch (Make-Outsource) Data Table Variable costs: Direct materials Direct labor Direct materials Variable overhead Direct labor 6.00 3.50 5.00 5.50 Variable overhead Purchase price from outsider Fixed overhead Total differential cost per unit 20.00 Manufacturing product cost Print Done
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