Cool Boards manufactures snowboards. Its cost of making 30,125 bindings is as follows: (Click the icon to view the costs.) Suppose an outside supplier will sell bindings to Cool Boards for $13 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 $0.60 per binding. Read the requirements. Requirement 1. Cool Boards' accountants predict that purchasing the bindings from the outside supplier will enable the company to avoid $2,400 of fixed overhead. Prepare an analysis to show whether the company should make or buy the bindings. (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. Use a minus sign or parentheses in the Difference column when the cost to make exceeds the cost to buy.) Incremental Analysis Outsourcing Decision Variable Costs Plus: Fixed Costs Make Buy (Outsource) Bindings Bindings Difference Data table Direct materials $ 25,000 Direct labor 83,000 Variable manufacturing overhead .... 50,000 83,000 Fixed manufacturing overhead $ 241,000 Total manufacturing costs Cost per pair ($241,000 30,125) ... $ 8.00 Print Done - Requirements 1. Cool Boards' accountants predict that purchasing the bindings from the outside supplier will enable the company to avoid $2,400 of fixed overhead. Prepare an analysis to show whether the company should make or buy the bindings. 2. The facilities freed by purchasing bindings from the outside supplier can be used to manufacture another product that will contribute $2,600 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 Requirement 1. Cool Boards' accountants predict that purchasing the bindings from the outside supplier will enable the company to avoid $2,400 of fixed overhead. Prepare an analysis to show whether the company should make or buy the bindings. (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. Use a minus sign or parentheses in the Difference column when the cost to make exceeds the cost to buy.) Incremental Analysis Outsourcing Decision Variable Costs Plus: Fixed Costs Make Bindings Buy (Outsource) Bindings Difference Total cost of 30,125 bindings Decision: Requirement 2. The facilities freed by purchasing bindings from the outside supplier can be used to manufacture another product that will contribute $2,600 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 Requirement 2. The facilities freed by purchasing bindings from the outside supplier can be used to manufacture another product that will contribute $2,600 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. (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 Outsourcing Decision (a) Make (b) Leave (c) Make Binding Facilities Idle Another Product Variable Costs Plus: Fixed Costs Total cost of 30,125 bindings Less: Profit from another product Net cost Decision