Cool Boards manufactures snowboards. Its cost of making 2,100 bindings is as follows: E (Click the icon to view the costs.) Suppose Livingston 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 $0.50 per binding. Read the requirements. Requirement 1. Cool Boards' accountants predict that purchasing the bindings from Livingston will enable the company to avoid $1,800 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 Bindings Outsource Bindings Difference (Make-Outsource) Binding costs Variable costs: Direct materials Direct labor Variable overhead Fixed costs Purchase price from Livingston Transportation Logo Total differential cost of 2,100 bindings Cool Boards manufactures snowboards. Its cost of making 2,100 bindings is as follows: E: (Click the icon to view the costs.) Suppose Livingston 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 $0.50 per binding. Read the requirements. Requirement 1. Cool Boards' accountants predict that purchasing the bindings from Livingston will enable the company to avoid $1,800 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.) A X - Requirements 1 - X Differen (Make-Outs Data Table $ Direct materials Direct labor Variable overhead 17,550 3,200 2,060 6,400 1. Cool Boards' accountants predict that purchasing the bindings from Livingston will enable the company to avoid $1,800 of fixed overhead. Prepare an analysis to show whether Cool Boards should make or buy the bindings. The facilities freed by purchasing bindings from Livingston can be used to manufacture another product that will contribute $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: (a) make bindings, (b) buy bindings and leave facilities idle, or (c) buy bindings and make another product. Fixed overhead $ 29,210 Total manufacturing costs for 2,100 bindings Print Print Done Done Enter any number in the edit fields and then click Check
