Do - it makes downhill ski equipment. Assume that Atomic has offered to produce ski poles for Do-it for $24 per pair. Do - it needs 160,000 pairs of poles per period. Do - it can only avoid $130,000 of fixed costs if it outsources, the remaining fixed costs are unavoidable. Do-it currently has the following costs at a production level of 160,000 pairs of poles: (Click the icon to view the table.) 1. 2. Should Do-it outsource ski pole production if the next best use of the freed capacity is to leave it idle? What effect will outsourcing have on Do-it's operating income? If the freed capacity could be used to produce ski boots that would provide $1,710,000 of operating income, should Do - it outsource ski pole production? 1. Should Do-it outsource ski pole production if the next best use of the freed capacity is to leave it idle? What effect will outsourcing have on Do-it's operating income? Begin by preparing the incremental analysis for outsourcing decision. (Use a minus sign or parentheses in the Difference column if the cost to make exceeds the cost to outsource.) Outsource Ski Incremental Analysis Outsourcing Decisions Make Ski Poles Poles Difference Variable costs: Plus: Fixed costs - X Data Table Total cost of producing 160,000 pairs of poles Manufacturing Costs Cost per pair Total Cost (160,000 pairs) $ 1,280,000 $ 8.00 Direct Materials Direct Labor 80,000 0.50 Variable MOH 880,000 976,000 5.50 6.10 Fixed MOH $ 3,216,000 $ 20.10 Total Print Done