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Cool Boards manufactures snowboards Its cost of making 1,850 bindings is as follows: (Click the icon to view the costs.) Suppose an outside supplier will
Cool Boards manufactures snowboards Its cost of making 1,850 bindings is as follows: (Click the icon to view the costs.) Suppose an outside supplier will sell bindings to Cool Boards for $15 each. Cool Boards will pay $1.00 per unit to transport the bindings to its manufacturing plant, where it will add its own logo at a cost of $0.30 per binding. Read the reguirements. Requirement 1. Cool Boards' accountants predict that purchasing the pindings from the outside supplier will enable the company to avoid $2,000 of fixed over head, Prepare an analysis to show whether Cool Boards should make or buy the bindings. (Entera"0" for any zero balances. Round any per unit amounts to the nearest cent and your final answers to the nearest whole dollar. Use a minus sign or parentheses in the Difference column when the cost to make exceeds the cost to buy Incremental Analysis Make Buy (outsource Outsourcing Decision Bindings Bindings Differe nce Variable Costs Plus: Fi xed Costs Total cost of 1,850 bindings Decision Requirement 2. The facilities freed by purchasing bindings from the outside supplier can be used to manufacture another product that will contribute $2,900 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's facilities: (a) make bindings, (b) buy bindings and leave facilities idle, or (c) buy bindings and make another prod (Enter a "0" for any zero balances. Round any per unit amounts to the nearest cent and your final answers to the nearest whole dollar) Buy (outsource) Bindings Incremental Analysis (a) Make (b) Leave (c) Make Outsourcing Decision Binding Facilities Idle Another Product Variable Costs Plus: Fi xed Costs Total cost of 1,850 bindings Less: Profit from another product Net cost Decision
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