OmniSports Plastics Department is currently manufacturing 5,000 pairs of skates annually, making full use of its machine capacity. The selling price and total costs per unit associated with OmniSports skates are:

Selling price per pair of skates $98

Costs per pair of skates

Molded plastic $8

Other direct materials 12

Variable machine operating costs ($16 per

machine hour 24

Manufacturing overhead costs 18

Marketing and administrative costs 21 83

Operating income per pair of skates $15

OmniSport believes it can sell 8,000 pairs of skates annually if it had sufficient manufacturing capacity. Colcott Inc., a supplier of quality products, has agreed to provide up to 6,000 pairs of skates per year at a price of $75 per pair delivered to OmniSports facility.

Jack Petrone, OmniSports product manager, ahs suggested that the company can make better use of its Plastics Department by manufacturing snowboard bindings. Petrone believes that OmniSport could expect to sell up to 12,000 snowboard bindings annually at a price of $60 per binding. Petrones estimate of the selling price and total costs per unit to manufacture 12,000 bindings are:

Selling price per snowboard binding $60

Costs per snowboard binding

Molded plastic $16

Other direct materials 4

Variable machine operating costs ($16 per

machine hour) 8

Manufacturing overhead costs 6

Marketing and administrative costs 10 44

Operating income per snowboard binding $16

Other information pertinent to OmniSports operations includes the following:

* In the Plastics Department, OmniSport uses machine-hours as the allocation base for manufacturing overhead costs. The fixed manufacturing overhead component of these costs for the current year is the $30,000 of fixed plantwide manufacturing over head that has been allocated to the Plastics Department. These costs will not be affected by the product-mix decision.

* Variable marketing and administrative costs per unit for the various products are as follows:

Manufactured in-line skates $9

Purchased in-line skates 4

Manufactured snowboard bindings 8

Optimal product mix required

Calculate the quantity of each product that OmniSport should manufacture and/or purchase to maximize operating income in 2003. Show details of your calculations.