Mountain Fun manufactures snowboards. Its cost of making 19,000 bindings is as follows: E (Click the icon to view the costs.) Suppose an outside supplier will sell bindings to Mountain Fun for $17 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 $0.40 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 $2,100 of fixed overhead. Prepare an analysis to show whether Mountain Fun should make or buy the bindings. (Enter a "0" for any zero balances. Round any per unit amounts to 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 Difference Outsourcing Decision Bindings Variable Costs Plus: Fixed Costs Total cost of 19,000 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 Mountain Fun had produced the bindings. Show which alternative makes the best use of Mountain Fun'ss facilities: 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 (c) Make (a) Make (b) Leave Outsourcing Decision Binding Facilities Idle Another Product Variable Costs Plus: Fixed Costs Total cost of 19,000 bindings Less: Profit from another product Net cost Decision: Data Table Requirements 1. Mountain Fun's accountants predict that purchasing the bindings from the outside supplier will enable the company to avoid $2,100 of fixed overhead. Prepare an analysis to show whether Mountain Fun should make or buy the bindings. Direct materials 22,000 fad Direct labor 81,000 Variable manufacturing overhead 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 Mountain Fun had produced the bindings. Show which alternative makes the best use of Mountain Fun'ss facilities: (a) make bindings, (b) buy bindings and leave facilities idle, or (c) buy bindings and make another product. 44,000 81,000 Fixed manufacturing overhead. $ 228.000 Total manufacturing costs Cost per pair ($228,000 / 19,000) 12.00 .........$ Print Done Print Done