Outdoor Life 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 Life for $12 each. Outdoor Life 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 Life's 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.) Make Incremental Analysis Outsourcing Decision Buy (Outsource) Bindings Bindings Difference Variable Costs Plus: Fixed Costs Total cost of 1,890 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 Outdoor Life had produced the bindings. Show which alternative makes the best use of Outdoor Life'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.) Buy (Outsource) Bindings (b) Leave (c) Make Incremental Analysis (a) Make Outsourcing Decision Binding Facilities Idle Another Product Variable Costs Plus: Fixed Costs Total cost of 1,890 bindings Less: Profit from another product Net cost Decision: Data Table 18,000 3,200 Direct materials.. $ Direct labor. ... Variable manufacturing overhead ..... Fixed manufacturing overhead $ Total manufacturing costs Cost per pair ($30,240 = 1,890) $ 2,340 6,700 30,240 16.00 Print Done Requirements 1. Outdoor Life's 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 $2,800 to profit. Total fixed costs will be the same as if Outdoor Life had produced the bindings. Show which alternative makes the best use of Outdoor Life's facilities: (a) make bindings, (b) buy bindings and leave facilities idle, or (c) buy bindings and make another product. Print Done