Cool Boards manufactures snowboards. Its cost of making 1700 bindings is as follows (Click the icon to view the costs) Suppose Lewis will sell bindings to Cool Boards for $13 each Cool Boards would pay $3 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 Direct materials $ 17,530 3,000 Direct labor Variable overhead 2,060 7,200 Fixed overhead $ 29,790 Total manufacturing costs for 1,700 bindings Requirement 1. Cool Boards' accountants predict that purchasing the bindings from Lewis will enable the company to avoid $2,500 of fixed overhead Prepare an analysis to show whether Cool Boards should make or buy the bindings. (Only enter the not relevant costs. For the Difference column, use a minus signor parentheses only when the cost of outsourcing exceeds the cost of making the bindings in-house) Make Outsource Bindings Difference (Make-Outsource) Bindings Binding costs Variable costs Direct materials Direct labor Variable overhead Fixed costs Purchase price from Lewis Transportation Logo Total differential cost of 1,700 bindings Should Cool Boards make or buy the bindings? Requirement 2. The facilities freed by purchasing bindings from Lewis can be used to manufacture another product that will contribute $2,000 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 costs) Outsource Bindings Make Facilities Make New Binding costs Bindings Idle Product Variable Costs Direct materials Direct labor Variable overhead Fixed costs Purchase price from Lewis Transportation Logo Facilities Make New Make Bindings Idle Product Binding costs Variable Costs Direct materials Direct labor Variable overhead Fixed costs MI Purchase price from Lewis 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