Rossignol makes downhill ski equipment. Assume that Atomic has offered to produce ski poles for Rossignol for 518 per pair Rossignol needs 100,000 pairs of poles per period Rossignol can only avoid 5125,000 of fixed costs if it outsources, the remaining fixed costs arounavoidable Rossignol currently has the following costs at a production level of 100,000 pairs of poles (Click the icon to view the table 1 1. Should Rossignol outsource ska pole production if the next best use of the freed capacity is to leave it ido? What effect will outsourcing have on Rossignol's operating income? 2. If the freed capacity could be used to produce ski boots that would provide 5500,000 of operating income, should Rossignol outsource slo pole production? 1. Should Rossignol outsource sk pole production if the next best use of the freed capacity is to leave it ido? What affect will outsourcing have on Rossignols operating income? Begin by preparing the incremental analysis for outsourcing decision (Use a minus sign or parentheson in the Difference column the cost to make exceeds the cost to outsource) Outsource Ski Incremental Analysis Outsourcing Decisions Poles Vailable costs Plus: Fixed costs Make Ski Poles Difference Total cost of producing 100,000 pairs of poles ipment Assume that Atomic has offered to produce ski poles for Rossional for $18. ner pair RC nly 000 Data Table le sk e u Manufacturing Costs Cost per pair Total Cost (100,000 pairs) $ 750,000 $ 7.50 80,000 0.80 520,000 5.20 650,000 6.50 Direct Materials Direct Labor Variable MOH kipl tal a Fixed MOH $ 2,000,000 $ 20.00 Total cour Print Done 10 pa