Outdoor Sports manufactures snowboards. Its cost of making 1,850 bindings is as follows: (Click the icon to view the costs.) Suppose an outside supplier will sell bindings to Outdoor Sports for $14 each. Outdoor Sports will pay $3.00 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 Sports' accountants predict that purchasing the bindings from the outside supplier will enable the company to avoid $2,300 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.) Incremental Analysis Outsourcing Decision Variable Costs Plus: Fixed Costs Total cost of 1,850 bindings Decision: Make Bindings Buy (Outsource) Bindings Difference Requirement 2. The facilities freed by purchasing bindings from the outside supplier can be used to manufacture another product that will contribute $3,300 to profit. Total fixed costs will be the same as if Outdoor Sports had produced the bindings. Show which alternative makes the best use of Outdoor Sports' 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 Outsourcing Decision (a) Make (b) Leave (c) Make Binding Facilities Idle Another Product Variable Costs Plus: Fixed Costs Total cost of 1,850 bindings Less: Profit from another product Net cost Decision: Data table Direct materials $ 17,750 Direct labor 3,400 Variable manufacturing overhead 2,355 6,650 Fixed manufacturing overhead $ 30,155 Total manufacturing costs Cost per pair ($30,155 +1,850) ...... $ 16.30 - X Requirements 1. Outdoor Sports' accountants predict that purchasing the bindings from the outside supplier will enable the company to avoid $2,300 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 $3,300 to profit. Total fixed costs will be the same as if Outdoor Sports had produced the bindings. Show which alternative makes the best use of Outdoor Sports' facilities: (a) make bindings, (b) buy bindings and leave facilities idle, or (c) buy bindings and make another product.