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RootSyslems manufactures an optical switrh that it uses in its nal orodud, RoolSyslems incurred the following RootSyems does not yet know how many...

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RootSyslems manufactures an optical switrh that it uses in its final orodud, RoolSyslems incurred the following RootSyfiems does not yet know how many switches it will need this year; howeven another company has offered manufacturing costs when it produced 66,000 units last year:
a (Click the icon to View the manufacturing costs) Read the moiremenls. Decision' Y because the variable cost per unit to make the switch is Requirement 2. Now, assume that RootSystems can avoid $106,000 of fixed cums a year m
switches. What should the company do now? Complete an outsourcing decision analysis assuming fixed costs can be avoided by outsourt
RootSystems Outsourcing Decisio n Make Buy switch es switches Choose from any list or enter any number in the input fields and then continue to the next question. E Type here to search Q to sell RoolSystems the switch for $16.50 per unit. tfRoolSystems buys the switch from the outside supplier. the
manufacturing tacilities that will be idle cannot be used for any other purpose yet none oi the fixed costs are
avoidable. : than the variable cost per unit to buy the switch
duction In addition, because sales are increasing‘ RootSysterns needs 71,000 switches a year ratherthan 66,000
greater
less ”Id the number of units needed have incre ased,

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1 RootSystems manufactures an optical switch that it uses in its final produd. RootSystems incurred the following RootSystems does not yet know how many switches it will need this year; however. another company has offered manufacturing cosls when il produced 66,000 units last year: to sell RoolSystems the switch for $16 5|] per unit lfRoolSystems buys the switch from the outside supplier, the a (Click the icon .0 view the manufacturing costs.) manufacturing facilities that will be idle cannot be used for any other purpose. yet none of the fixed costs are
avoidable. Read the moirements. Outsourcing Decision Make Buy
switches switches
Total relevant costs
Decision V because the total relevant costs to make the thd1es are V than the total relevant costs to buy the switches, Requirement 3. Given the last scenario, what is the mom RootSystems would be willing to pay to outsource the switches? Rania hv Mnntifirinn the hnclr fnrmuln Illa} Ia "cud IA flatnrmlnn lhn inflifl'nrnnt nnlamlrr-inn rnel nnr unit Choose from any list or enter any number in the input fields and T.an Continue [0 the next question E Type hereto sear Lia

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RootSystems manufactures an opticai switch that it uses in its final product. RootSystems incurred the following RootSystems does not yet know how many switches it will need this year: howeven another company has offered manufacturing costs when it produced 66,000 units iast year:
a (Click the icon to View the manu actunng costs.) Read the fluirements.
i I l—l I Total relevant costs Decision. Y because the total relevant costs to make the switcha are to sell RoolSystems the switch for $i5.5l] per unit. lfRoolSystems buys the swilch from the outside supplier, the
manufacturing lacilities that will be idle cannot be used for any other purpose yet none of the fixed costs are
avoidable. V than the total relevant costs to buy the switches. Requirement 3. Given the iast scenario‘ what is the most RootSystems would be willing to pay to outsource the switches? Begin by identifying the basiclormula that is used to determine the indifferent. outsourcing cost per unit Cost if making switdtes = Cost if outsourcing switches Using the basic formula you determined above, soive for the outsourcing cost at which RootSystems would be RootSystems wouid be indifferent between outsourcing and making the switches if the outsourcing cost was $ inditferent between outsourcing and making the switches. (Enter your per unit caicuialion to the nearest cent.) oer per switch Therefore Systems wiil only be willing to outsource ifthe outsourcing cost is $ switch Choose from any list or enter any number in the input fields and then continue to the next question

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RootSystems manufactures an optical switch that it uses in its final produd. RootSystems incurred the following RootSystems does not yet know how many switches it will need this year; however. another company has offered manufacturing costs when it produced 66,000 units last year: to sell RootSystems the switch tor $15 50 per unit lfRootSystems buys the switch tram the outside supplier tl'ie
a (Click the icon to View the manufacturing costs.) manufacturing facilities that will be idle cannot be used for any other purpose, yet none of the fixed costs are
avoidable Read the muire merits, Complete an incremental analysis to show whether RootSystems should make or buy the swildl (Enter a "0" tor any zero amounts Round amounts to the nearesl cent, Use a minus sign or parentheses when the cost to buy A
exceeds the cost to ma ice ) RootSystems
Incremental Analysis for Outsourcing Decision
Make Bu), 0 Data Table Unit Unit Difierence Variable cost per unit: Direct materials 726.000
Direct labor 99.000 Variable MOH 132.000 Fixed MOH 353-00”
5: 1.3211000 Total manufacturing cost for 66 000 units Total variable cost per unit Choose fl'om any list or enter any number in the input fields and then continue to the next question. a 0 Type here to search

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Q RootSystems manufactures an optical switch that it uses in its final produd. RootSystems incurred the following RootSystems does not yet know how many switches it will need this year; however. another company has offered manufacturing costs when it produced 66,000 units last year: to sell RootSystems the switch for $15.50 per unit lfRootSystems buys the switch trom the outside supplier. the a (Click the icon .0 View the manufacturing costs.) manufacturing facilities that will be idle cannot be used for any other purpose, yet none of the fixed costs are
avoidable Read the fluirements. Decision 1 because the variable cost per unit to make the switch is : than the variable cost per unit to buy the switch
Requirem stems can avoid $106,000 of fixed costs a year by outsourcing production. In addition. because sales are increasing. RootSystems needs 71.000 switches a year raiherthan 68.000
switches ‘ Make the optical switch r7
Complete Buy the optical SWilCi'l assuming fixed costs can be avoided by outsourcing production and the number of units needed have increased.
RootSystJems Outsourcing Decision Make Buy switches switches Choose from any list or enter any number in the input fields and tnen continue to the next question E 0 Type here to search

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