Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Need all reqs! Outdoor Sports manufactures snowboards. Its cost of making 1,890 bindings is as follows: (Click the icon to view the costs.) Suppose an

image text in transcribed

Need all reqs!

Outdoor Sports manufactures snowboards. Its cost of making 1,890 bindings is as follows: (Click the icon to view the costs.) Suppose an outside supplier will sell bindings to Outdoor Sports for $11 each. Outdoor Sports will pay $2.00 per unit to transport the bindings to its manufacturing plant, where it will add its own logo at a cost of $0.30 per binding. Read the requirements. Requirement 1. Outdoor Sports' accountants predict that purchasing the bindings from the outside supplier will enable the company to avoid $2,000 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) Outsourcing Decision Bindings Bindings Difference Variable Costs Plus: Fixed Costs : Total cost of 1,890 bindings Decision: - Requirement 2. The facilities freed by purchasir bindings. Show which altemative makes the bes amounts to the nearest cent and your final answ fixed costs will be the same as if Outdoor Sports had produced the e another product. (Enter a "O" for any zero balances. Round any per unit Requirements Data table 18,000 Incremental Analysis Outsourcing Decision Variable Costs Plus: Fixed Costs Total cost of 1,890 bindings Less: Profit from another product : 1. Outdoor Sports accountants predict that purchasing the bindings from the outside supplier will enable the company to avoid $2,000 of fixed overhead. Prepare an analysis to show whether the company should make or buy the bindings 2. The facilities freed by purchasing bindings from the outside supplier can be used to manufacture another product that will contribute $2,700 to profit. Total fixed costs will be the same as if Outdoor Sports had produced the bindings. Show which alternative makes the best use of Outdoor Sports' facilities: (a) make bindings, (b) buy bindings and leave facilities idle, or (c) buy bindings and make another product 3.200 Direct materials S Direct labor... Variable manufacturing overhead .... Fixed manufacturing overhead ... S Total manufacturing costs Cost per pair ($30,240 + 1,890) .......$ 2,340 8,700 30.240 Net cost 16.00 Print Done )

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions