Make or Buy Canyoneer Products incurs the following costs for 20,000 pairs of high-tech hiking books. Total Per Unit Direct materials $200,000/20,000 Direct labor 800,000/20,000 Variable manufacturing overhead 150,000/20,000 Fixed manufacturing overhead 250,000 N/A Total manufacturing costs $1,400,000 Cost per pair ($228,000 / 19,000) $70.00 Another manufacturer has offered to sell Canyoneer Products similar boots for $60 a pair, a total purchase cost of $1,200,000. None of the fixed MOH can be avoided. 1. Given the scenario, should Canyoneer Products make or outsource (buy) the production of the hiking boots? MAKE BUY 2. If Canyoneer Products outsources and leaves its plant idle, it can save $30,000 of fixed overhead cost. Should Canyoneer Products make or outsource the production of hiking boots? MAKE BUY 3. The company can use the released facilities to make other products that will contribute $80,000 to profits. In this case, the company will not be able to avoid any fixed costs. Should Canyoneer Products make or outsource the production of hiking boots? MAKE BUY