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This question: 11 point(s) possible nufactures snowboards. Its cost of making 20,000 bindings is as follows: on to view the costs.) Side supplier will
This question: 11 point(s) possible nufactures snowboards. Its cost of making 20,000 bindings is as follows: on to view the costs.) Side supplier will sell bindings to Outdoor Life for $14 each. Outdoor Life will pay $3.00 per unit to transport the bindings to its manufacturing plant, where it will add its own logo at a cost of $0.50 per binding. ments. Outdoor Life's accountants predict that purchasing the bindings from the outside supplier will enable the company to avoid $1,800 of fixed overhead. Prepare an analysis to show whether the company should make or buy the bindings. (Enter a "0" fo any per unit amounts to the nearest cent and your final answers to the nearest whole dollar. Use a minus sign or parentheses in the Difference column when the cost to make exceeds the cost to buy.) ental Analysis cing Decision Make Bindings Buy (Outsource) Bindings Difference sts ,000 bindings The facilities freed by purchasing bindings from the outside supplier can be used to manufacture another product that will contribute $3,400 to profit. Total fixed costs will be the same as if Outdoor Life had produced the bindings. Show which alternat oor Life's facilities: (a) make bindings, (b) buy bindings and leave facilities idle, or (c) buy bindings and make another product. (Enter a "0" for any zero balances. Round any per unit amounts to the nearest cent and your final answers to the nearest w Buy (Outsource) Bindings mental Analysis (a) Make (b) Leave (c) Make urcing Decision Binding Facilities Idle Another Product sts 000 bindings mm another product Data table Direct materials $ 20,000 Direct labor 80,000 Variable manufacturing overhead 40,000 80,000 Fixed manufacturing overhead $ 220,000 Total manufacturing costs Cost per pair ($220,000 20,000). $ 11.00 Print Done
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