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Outdoor Life manufactures snowboards. Its cost of making 2,000 bindings is as follows: Direct materials $17,550 Direct labor 3,400 Variable overhead 2,040 Fixed overhead 6,300

Outdoor Life manufactures snowboards. Its cost of making 2,000 bindings is as follows:
Direct materials $17,550
Direct labor 3,400
Variable overhead 2,040
Fixed overhead 6,300
Total manufacturing cost for 2,000 bindings $29,290
Suppose Lancaster will sell bindings to Outdoor Life for $14 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 $0.70 per binding.
Requirements:
1. Outdoor Life's accountants predict that purchasing the bindings from Lancaster will enable the company to avoide $2,100 of fixed overhead. Prepare an analysis to show whether Outdoor Life should make or buy the bindings.

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