Pro - Ski makes downhill ski equipment. Assume that Atomic has offered to produce ski poles for Pro - Ski for $21 per pair. Pro-Ski needs 120,000 pairs of poles per period. Pro-Ski can only avoid $130,000 of fixed costs if it outsources; the remaining fixed costs are unavoidable. Pro - Ski currently has the following costs at a production level of 120,000 pairs of poles: (Click the icon to view the table.) 1. Should Pro-Ski outsource ski pole production if the next best use of the freed capacity is to leave it idle? What effect will outsourcing have on Pro - Ski's operating income? 2. If the freed capacity could be used to produce ski boots that would provide $1,108,000 of operating income, should Pro - Ski outsource ski pole production? 1. Should Pro - Ski outsource ski pole production if the next best use of the freed capacity is to leave it idle? What effect will outsourcing have on Pro - Ski's operating income? Begin by preparing the incremental analysis for outsourcing decision. (Use a minus sign or parentheses in the Difference column if the cost to make exceeds the cost to outsource.) Outsource Ski Incremental Analysis Outsourcing Decisions Make Ski Poles Poles Difference Variable costs: 2520000 Plus: Fixed costs 780000 Total cost of producing 120,000 pairs of poles kes downhill ski equipment. ki needs 120,000 pairs of poles per period. Pro - Ski can only avoid $130,000 of fixed costs if it outsou ug fixed costs are unavoidable. Pro - Ski currently has the following costs at a production level of 120,0 S: he icon to view the table. X Pro- i Data Table ve it idle? Wh will outs reed ca ting income, Pro- Cost per pair Manufacturing Costs Total Cost (120,000 pairs) "ro -Skil it idle? What utsourci Direct Materials $ 720,000 6.00 reparing Direct Labor 72,000 0.60 ses in the column Variable MOH 660,000 5.50 780,000 Fixed MOH 6.50 mental Al hce $ 2,232,000 $ osts: Total 18.60 d costs of prod Print Done