Outdoor Fun manufactures snowboards. Its cost of making 23,600 bindings is as follows: B (Click the icon to view the costs.) Suppose an outside supplier will sell bindings to Outdoor Fun for $18 each. Outdoor Fun will pay $1.00 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. Outdoor 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 Outdoor Fun 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.) Buy Incremental Analysis Make (Outsource) Outsourcing Decision Bindings Bindings Difference Variable Costs Plus: Fixed Costs Total cost of 23,600 bindings Decision: Requirement 2. The facilities freed urchasing bindings from the outside supplier be used to manufacture another product that will contribute $3,000 to Total fixed costs will be the as if Outdoor Fun had produced the bindings. Show which alternative makes the best of Outdoor Fun'ss 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.) Buy (Outsource) Bindings Incremental Analysis (a) Make (b) Leave (c) Make Another Requirements Outsourcing Decision Binding Facilities Idle Product Data Table Variable Costs 1. Outdoor Fun's accountants predict that purchasing the bindings from Plus: Fixed Costs the outside supplier will enable the company to avoid $1,800 of fixed Total cost of 23,600 Direct materials $ 24,000 overhead. Prepare an analysis to show whether Outdoor Fun should bindings Direct labor 82,000 make or buy the bindings. Less: Profit from another Variable manufacturing overhead 2. The facilities freed by purchasing bindings from the outside supplier 48,000 product can be used to manufacture another product that will contribute Fixed manufacturing overhead 82,000 $3,000 to profit. Total fixed costs will be the same as if Outdoor Fun Net cost $236,000 Total manufacturing costs had produced the bindings. Show which alternative makes the best use of Outdoor Fun'ss facilities: (a) make bindings, (b) buy bindings Decision: Cost per pair ($236,000 / 23,600) .... $ 10.00 and leave facilities idle, or (c) buy bindings and make another product. Print Done Print Done