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Image Systems manufactures an optical switch that it uses in its final product. Another company...

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Accounting

Image Systems manufactures an optical switch that it uses in its final product. Another company has offered to sell Image Systems the switch for $1400 per unit. None of Image's fixed costs are avoidable.
(Click the icon to view the outsourcing decision.)
Image Systems needs 85,000 optical switches. By outsourcing them, Image Systems can use its idle facilities to manufacture another product that will contribute $221,000 to operating income.
Read the requirements.
Requirement 1. Identify the expected net costs that Image Systems will incur to acquire 85,000 switches finder three alternative plans.
\table[[,,Outsource switches],[,Facilities,Make new,],[Switch costs,Make,Idle,product]]
Data table
image

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