Cool Boards manufactures snowboards. Its cost of making 1.700 bindings is as follows: Click the icon to view the costs) Suppose Hemingway will sell bindings to Cool Boards for S16 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 Hemingway will enable the company to avoid $2,300 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) Make Outsource Difference Binding costs Bindings Bindings (Make-Outsource) Variable costs: Direct materials Direct labor Variable overhead Fixed costs Purchase price from Hemingway 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 Hemingway can be used to manufacture another product that will contributo $3,300 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 not costs) Outsource Bindings Make Facilities Make New Binding costs Bindings Idie Product Variable Costs: Direct materials Direct labor Variable overhead Fixed costs Purchase price from Hemingway 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 Cool Boards manufactures snowboards. Its cost of making 1,700 bindings is as follows: Click the icon to view the costs) Suppose Hemingway will soll bindings to Cool Boards for $16 each. Cool Boards would pay 51 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 Hemingway will enable the company to avoid $2,300 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) Make Outsource Difference Binding costs Bindings Bindings (Make--Outsource) Variable costs Direct materials Direct tabor Variable overhead Fixed costs Purchase price from Hemingway 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 Hemingway can be used to manufacture another product that will contribute $3,300 to profit. Totai fixed costs will be the same as if Coo ards facilities. (Only enter the net relevant costs. Enter all costs as pos Data table - 17.590 3.200 2.070 5.800 29,660 Binding costs Direct materials Variable Conts Direct labor Direct materials Variable overhead Direct labor Fixed overhead Variable overhead Total manufacturing costs for 1,700 bindings Fixed costs Purchase price from Hemingway Transportation Logo Print Done Expected profit from new product Expected not cost of obtaining 1,700 bindings Which alternative makes the best use of Cool Boards' facilities? Decision: Cool Boards manufactures snowboards. Its cost of making 1.700 bindings is as follows Click the icon to view the costs.) Suppose Hemingway will sell bindings to Cool Boards for 516 each. Cool Boards would pay 51 per un 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 Hemingway will enable the company to avoid $2,300 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) Make Outsource Difference Binding costs Bindings Bindings (Make-Outsource) Variable costs Direct materials Direct labor Variable overhead Fixed costs Purchase price from Hemingway 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 Hemingway can be used to manufacture another product that will contribute $3.300 to profit. Total foxed costs will be the (Only enter the nel relevant costs. Entor Requirements - 1. Cool Boards' accountants predict that purchasing the bindings from Hemingway will enable the company to avoid $2,300 of fixed overhead. Prepare an analysis to show whether Variable Costs: Cool Boards should make or buy the bindings Direct materials 2. The facilities freed by purchasing bindings from Hemingway can be used to manufacture another product that will contribute $3.300 to profit. Total fixed costs will be the same as if Direct labor Cool Boards had produced the bindings. Show which alternative makes the best use of Variable overhead Cool Boards' facilities: (a) make bindings. (b) buy bindings and leave facilities idle, or (c) buy bindings and make another product Fixed costs Purchase price from Transportation Print Logo Done Expected profit from Expected net cost of obtaining 1,700 bindings Which alternative makes the best use of Cool Boards' facilities? Decision
