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Outdoor Life manufactures snowboards. Its cost of making 2.100 bindings is as follows (Click the icon to view the costs.) Suppose Lancaster wil sell bindings
Outdoor Life manufactures snowboards. Its cost of making 2.100 bindings is as follows (Click the icon to view the costs.) Suppose Lancaster wil sell bindings to Outdoor Life for $13 each. Ouidoor Life would pay $2 per unit to transport the bindings to its manufacturing plant, where it would add its own logo at a cost of so.80 per binding Read the reuirements Requiren ent 1 Outdoor Life's accountants predict that u e asi the bindin from Lancaster Will enable the company to avoid S2. 100 o" ed ove head Prepare an analysis to how whether Ou door Life should make or buy the bindi Dfference column, use a minus sign or parentheses only when the ecost of outsoureing exeeeds the cost of making the bindings in-house on y enter the net elevant eosts. For the Requirements Binding costs Bindings Bindings (M Varisble costs: Direct materials Direct labor 1. Outdoor Life's accountants pradat that purchasing tha bindings tom Lancaster will nable th company to avoid $2,100 of fxad overhead. Prapare an analyaia to ahow whathar Outdoor Lifa ahou d make or buy the bind ngs. 2. The faciltes freed by purchssing bindings from Lancaster can be used to manufacture another product that will contribute $3.000 to profit. Total fixed costs will be the same as if Outdoor Life had produced the bindings. Show which aternative makes the best use of Outdoor Lfes fscilities: (a) make bindings, (b) buy bindings and leave facilities idle, or (c) buy bindings and make another product Fixed costs Purchsse price from Lancaster Logo Data Table Print Done Total differential cost of 2.100 bindings Direet materials Direct labor Varisble overhesd Fixed overhesd 17,500 2,700 2.070 7.000 29.270 costs for 2,100 bindings Enter any number in the edit fields and then click Check Answer. Print Done Check
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