safety first makes downhill ski equipped. Assume that atomic is offered to produce ski poles for safety first for $23 per pair. Safety first needs 130,000 pairs of polls per period. safety first can only avoid $140,000 of fixed costs if it outsources; The remaining fixed costs are unavoidable. Safety first currently has the following costs at a production level of 130,000 pairs of poles: (view image with table)

1. should safety first outsource keep all production if the next best use of the free capacity is to leave it idle? What effect will outsourcing have on safety first operating income?

2. if the free capacity could be used to produce ski boots that would provide $911,500 of operating income, should safety first outsource ski pole production

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