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Mauntain Fun manufacturas snawboards. ts cost of making 1,900 bindings is as follows (Click the icon to view the costs.) Suopose an outside supplier will
Mauntain Fun manufacturas snawboards. ts cost of making 1,900 bindings is as follows (Click the icon to view the costs.) Suopose an outside supplier will sell bindinge to Mountain Fun for $15 each. Mountain Fun will pay $1.00 per unit to transport the bindinge to its manufacturing plant, where it will add ts own logo st a cost of $0.20 per binding. Reed the requirements Requiroment 1. Mountain Fun's accountants predit that purchasing the bindings from the outside suppliar will enable the company to avoid $1,900 of fixed ovarhead. Prapare an analysis to show whether Mountain Fun should make or buy the bindings. (Entar a " for any zero balances. Round any per unit amounts to the nesreet cent and your final snswers to the nearest who le dollar. Use a minus eign or parentheses in the Difference column when the cost to make exceeds the cost to buy.) Buy (Outsaurce) Incremental Analysis Make Bindings Difference Outsourcing Decision Bindings Requirements Variabe Coets (1,900 Plus: Fixed Casts 1. Mountain Fun's accauntants predict that purchasing the bindings fram the outside supplier will enable the compeny to avoid $1,900 of fxed overhead. Prepare an analysis to show whether Mountain Fun should make or buy the bindings. Total cost of 1.S00 bindings 2. The facilties freed by purchasing bindings fram tha outside supplier can be usod to manufacture anather product that wil contribute $3,300 to pront. Total fixed costs will be the seme 88 if Mountain Fun hed produced the bindngs. Show which aternative makes the best use of Maurtain Fun'ss faciltes: (a) make bindings, b) buy bindngs and laave facilities idie, or (c) buy bindings and make another product i Date Table Print Done Drect materials 17,500 3.000 Direct labor Varable manutacturing overhead 3.230 7,050 Fxed menufacturing overhead S 30,7B0 Total manufacturing costs Cast per pair ($30,780 1,900) 16.20 Print Done
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