T18-3 (similar to) s Question Help Winter Fun makes downhill ski equipment. Assume that Atomic has offered to produce ski poles for Winter Fun for $19 per pair. Winter Fun needs 130,000 pairs of poles per period. Winter Fun can only avoid $190,000 of fixed costs if it outsources, the remaining fixed costs are unavoidable. Winter Fun currently has the following costs at a production level of 130,000 pairs of poles: (Click the icon to view the table.) 1. Should Winter Fun outsource ski pole production if the next best use of the freed capacity is to leave it idle? What effect will outsourcing have on Winter Fun's operating income? If the freed capacity could be used to produce ski boots that would provide $965,000 of operating income, should Winter Fun outsource ski pole production? 2. 1. Should Winter Fun outsource ski pole production if the next best use of the freed capacity is to leave it idle? What effect will outsourcing have on Winter Fun'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.) Make Outsource Incremental Analysis Outsourcing Decisions Ski Poles Ski Poles Difference Variable costs: Plus: Fixed costs Total cost of producing 130,000 pairs of poles D Data Table - X Manufacturing Costs Cost per pair (130,000 pairs) $ 6.00 0.50 Direct Materials Total Cost 780,000 65,000 650,000 780,000 Direct Labor Variable MOH 5.00 6.00 Fixed MOH 2.275.000 $ 17.50 Total Print Done