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Snowboard Inc. currently produces snowboards. Management is interested in outsourcing production of snowboards to a reputable manufacturing company that can supply the boards for $250
Snowboard Inc. currently produces snowboards. Management is interested in outsourcing production of snowboards to a reputable manufacturing company that can supply the boards for $250 per unit. Snowboard Inc. incurs the following annual production costs to produce 6,000 snowboards internally: Outsourcing production eliminates all variable production costs, the production supervisor's salary, and factory insurance costs. Factory building and equipment lease costs will remain the same regardless of the decision to outsource or to produce internally. Required: A. Perform a differential analysis, assuming that making the snowboard intemally is one alternative, and buying the snowboard from an outside manufacturer is the other alternative. A Alternative Cost to buy from outside Variable costs: Direct materials Direct labor Manufacturing overhead Fixed costs: Factory building and equipment lease Factory insurance Production supervisor salary Total production costs Double click and put your answer here. B
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