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Outdoor Life manufactures snowboards. Its cost of making 1,900 bindings is as follows: (Click the icon to view the costs.) Suppose Lewis will sell bindings
Outdoor Life manufactures snowboards. Its cost of making 1,900 bindings is as follows: (Click the icon to view the costs.) Suppose Lewis will sell bindings to Outdoor Life for $15 each. Outdoor Life would pay $3 per unit to transport the bindings to its manufacturing plant, where it would add its own logo at a cost of $0.40 per binding. Read the requirements ol Requirement 1. Outdoor Life's accountants predict that purchasing the bindings from Lewis will enable the company to avoid $2,000 of fixed overhead. Prepare an analysis to show whether Outdoor Life should make or buy the bindings. (Only enter the net relevant costs. For the Difference column, use a minus sign or parentheses only when the cost of outsourcing exceeds the cost of making the bindings in-house.) Make Outsource Difference (Make-Outsource) Binding costs Bindings Bindings - X Data Table Variable costs: Direct materials Direct labor Direct materials $ 17,500 Direct labor 2,900 Variable overhead Fixed costs Purchase price from Lewis Transportation Logo Variable overhead Fixed overhead 2,040 6,900 $ 29.340 Total manufacturing costs for 1,900 bindings Total differential cost of 1,900 bindings Print Done Re It Enter any number in the edit fields and then click Check Answer. parts remaining Clear All Check
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