Mountain Fun manufactures snowboards. Its cost of making 1,880 bindings is as follows: (Click the icon to view the costs.) Suppose an outside supplier will sell bindings to Mountain Fun for $14 each. Mountain Fun will pay $3.00 per unit to transport the bindings to its manufacturing plant, where it will add its own logo at a cost of $0.20 per binding. Read the requirements Requirement 1. Mountain Fun's accountants predict that purchasing the bindings from the outside supplier will enable the company to avoid $1,800 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 Make Buy (Outsource) Bindings Outsourcing Decision Bindings Difference Variable Costs Plus: Fixed Costs Total cost of 1,880 bindings Decision Requirement 2. The facilities freed by purchasing bindings from the outside supplier can be used to manufacture another product that will contribute $2,800 to profit. Total fixed costs will be the same as if Mountain Fun had produced the bindings. Show which alternative makes the best use of Mountain Fun's 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.) (a) Make Incremental Analysis Outsourcing Decision Buy (Outsource) Bindings (b) Leave (c) Make Facilities Idle Another Product Binding Variable Costs Plus: Fixed Costs Total cost of 1,880 bindings Requirement 2. The facilities freed by purchasing bindings from the outside supplier can be used to manufacture another product that will contribute $2,800 to profit. Total fixed costs will be the same as if Mountain Fun had produced the bindings. Show which alternative makes the best use of Mountain Fun's 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.) Incremental Analysis (a) Make Buy (Outsource) Bindings (b) Leave (c) Make Facilities Idle Another Product Outsourcing Decision Binding Variable Costs Plus: Fixed Costs Total cost of 1,880 bindings Less: Profit from another product Net cost Decision Data Table Direct materials... $ Direct labor..... Variable manufacturing overhead ..... Fixed manufacturing overhead .... $ Total manufacturing costs.. Cost per pair ($30,550 = 1,880) ..... $ 18,250 3,300 2,100 6,900 30,550 16.25 Print Done