Cool Boards manufactures snowboards. Its cost of making 1,700 bindings is as follows: (Click the icon to view the costs.) Suppose Monroe will sell bindings to Cool Boards for $16 each. Cool Boards would pay $1 per unit to transport the bindings to its manufacturing plant, where it would add its own logo at a cost of $0.40 per binding. Read the requirements. Requirement 1. Cool Boards' accountants predict that purchasing the bindings from Monroe will enable the company to avoid $2,600 of fixed overhead. Prepare an analysis to show whether Cool Boards should make or buy the bindings. (Only enter the net relevant costs. For the Difference column, use a minus sign or parentheses only when the cost of outsourcing exceeds the cost of making the bindings in-house.) Binding costs Variable costs: Direct materials Direct labor Variable overhead Fixed costs Purchase price from Monroe Transportation Logo Total differential cost of 1,700 bindings Should Cool Boards make or buy the bindings? Decision: Make Bindings Outsource Bindings Difference (Make-Outsource) Data table Direct materials $ 17,510 Direct labor 2,800 Variable overhead 2,040 6,500 Fixed overhead $ 28,850 Total manufacturing costs for 1,700 bindings Print Done Requirement 2. The facilities freed by purchasing bindings from Monroe can be used to manufacture another product that will contribute $3,500 to profit. Total fixed costs will be the same as if Cool Boards had produced the bindings. Show which alternative makes the best use of Cool Boards' facilities. (Only enter the net relevant costs. Enter all costs as positive values. Use a minus sign or parentheses for decreases to net- Binding costs Variable Costs: Outsource Bindings Make Facilities Make New Bindings Idle Product Requirements Direct materials Direct labor Variable overhead 1. Cool Boards' accountants predict that purchasing the bindings from Monroe will enable the company to avoid $2,600 of fixed overhead. Prepare an analysis to show whether Cool Boards should make or buy the bindings. 2. The facilities freed by purchasing bindings from Monroe can be used to manufacture another product that will contribute $3,500 to profit. Total fixed costs will be the same as if Cool Boards had produced the bindings. Show which alternative makes the best use of Cool Boards facilities: (a) make bindings, (b) buy bindings and leave facilities idle, or (c) buy bindings and make another product. ext (Click the icon to view the costs.) Suppose Monroe will sell bindings to Cool Boards for $16 each. Cool Boards would pay $1 per unit to transport the bindings to its manufacturing plant, where it would add its own logo at a cost of $0.40 per binding. Read the requirements. Purchase price from Monroe Transportation Logo Total differential cost of 1,700 bindings Should Cool Boards make or buy the bindings? Decision: Requirement 2. The facilities freed by purchasing bindings from Monroe can be used to manufacture another product that will co use of Cool Boards' facilities. (Only enter the net relevant costs. Enter all costs as positive values. Use a minus sign or parenthes Binding costs Outsource Bindings Facilities Make Bindings Idle Make New Product Data table Direct materials Direct labor Variable overhead $ 17,510 2,800 he bindings. Show which alternative makes the best 2,040 6,500 Fixed overhead $ 28,850 Total manufacturing costs for 1,700 bindings Variable Costs: Direct materials Direct labor Variable overhead Fixed costs Purchase price from Monroe Transportation Logo Expected profit from new product Expected net cost of obtaining 1,700 bindings Which alternative makes the best use of Cool Boards' facilities? Decision: Print Done Requirements 1. Cool Boards' accountants predict that purchasing the bindings from Monroe will enable the company to avoid $2,600 of fixed overhead. Prepare an analysis to show whether Cool Boards should make or buy the bindings. 2. The facilities freed by purchasing bindings from Monroe can be used to manufacture another product that will contribute $3,500 to profit. Total fixed costs will be the same as if Cool Boards had produced the bindings. Show which alternative makes the best use of Cool Boards' facilities: (a) make bindings, (b) buy bindings and leave facilities idle, or (c) buy bindings and make another product. Print Done ext