P8-52A (similar to) Question Help Mountain Sports manufactures snowboards. Its cost of making 26,200 bindings is as follows: Click the icon to view the costs.) Suppose an outside supplier will sell bindings to Mountain Sports for $12 each. Mountain Sports 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 $0.30 per binding Read the requirements Requirement 1. Mountain Sports' accountants predict that purchasing the bindings from the outside supplier will enable the company to avoid $2,500 of fixed overhead. Prepare an analysis to show whether Mountain Sports should make or buy the bindings. (Enter a "O 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 Make Buy Outsource) Outsourcing Decision Bindings Bindings Difference Variable Costs Plus: Fixed Costs Total cost of 26,200 bindings Requirements 1. Mountain Sports' accountants predict that purchasing the bindings from the outside supplier will enable the company to avoid $2.500 of fored overhead. Prepare an analysis to show whether Mountain Sports 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 $3.400 to profit. Total fixed costs will be the same as if Mountain Sports had produced the bindings. Show which alternative makes the best use of Mountain Sports's facilities: (a) make bindings. (b) buy bindings and leave facilities idle, or (c) buy bindings and make another product. Print Done P8-52A (similar to) Question Help Mountain Sports manufactures snowboards. Its cost of making 26,200 bindings is as follows: (Click the icon to view the costs.) Suppose an outside supplier will sell bindings to Mountain Sports for $12 each. Mountain Sports 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 $0.30 per binding. Read the requirements Requirement 1. Mountain Sports' accountants predict that purchasing the bindings from the outside supplier will enable the company to avoid $2,500 of fixed overhead. Prepare an analysis to show whether Mountain Sports should make or buy the bindings. (Enter a "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 Make Buy (Outsource) Outsourcing Decision Bindings Bindings Difference Variable Costs Plus: Fixed Costs Total cost of 26,200 bindings Data Table $ 21.000 86,400 42.000 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total manufacturing costs Cost per pair (S235,800 / 26,200) 86.400 $ 235,800 9.00 Print Done Done
