Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Wild Ride manufactures snowboards. Its cost of making 1,890 bindings is as follows: (Click the icon to view the costs.) Suppose an outside supplier will

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
Wild Ride manufactures snowboards. Its cost of making 1,890 bindings is as follows: (Click the icon to view the costs.) Suppose an outside supplier will sell bindings to Wild Ride for $13 each. Wild Ride will pay $2.00 per unit to transport the bindings to its manufacturing plant where it will add its ownloan at a cost of $0.30 or hindina Read the requirements 6 Data Table plier will enable the uld make or buy the our final answers to the Jake exceeds the cost to 18,000 3,200 Requirement 1. Wild Ride's company to avoid $1,900 of fil bindings. (Enter a "O" for any nearest whole dollar. Use an buy.) Incremental Analysi Outsourcing Decisid Variable Costs Plus: Fixed Costs Total cost of 1,890 bindings Direct materials $ Direct labor... Variable manufacturing overhead Fixed manufacturing overhead S Total manufacturing costs.. Cost per pair ($30,240 + 1,890)........ $ 2,340 6.700 30,240 16.00 Print Done Decision: Red prog whil buy and Requirements another Xings. Show s idle, or (c) prest cent 1. Wild Ride's accountants predict that purchasing the bindings from the outside supplier will enable the company to avoid $1,900 of fixed overhead. Prepare an analysis to show whether the company should make or buy the bindings. 2. 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 Wild Ride had produced the bindings. Show which alterative makes the best use of Wild Ride's facilities: (a) make bindings, (b) buy bindings and leave facilities idle, or (c) buy bindings and make another product Vall Entd Print Done Wild Ride manufactures snowboards. Its cost of making 1,890 bindings is as follows: (Click the icon to view the costs.) Suppose an outside supplier will sell bindings to Wild Ride for $13 each. Wild Ride will pay $2.00 per unit to transport the bindings to its manufacturing plant, where it will add its own logo at a cost of $0.30 per binding. Read the requirements. Requirement 1. Wild Ride's accountants predict that purchasing the bindings from the outside supplier will enable the company to avoid $1,900 of fixed overhead. Prepare an analysis to show whether the company should make or buy the bindings. (Enter a "0" for any zero balances. Round 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.) Incremental Analysis Make Buy (Outsource) Outsourcing Decision Bindings Bindings Difference Variable Costs Plus: Fixed Costs Total cost of 1,890 bindings Decision: Requirem purchasing bindings from the outside supplier can be used to manufacture another product th: Buy the bindings. ofit. Total fixed costs will be the same as if Wild Ride had produced the bindings. Show which alte f Wild Ride's facilities: (a) make bindings. (b) buy bindings and leave facilities idle, or (c) buy bindin Make the bindings. 1. (Enter a "0" for any zero balances. Round any per unit amounts to the nearest cent and your finar answers to the nearest whole dollar.) Buy (Outsource) Bindings Incremental Analysis (a) Make (b) Leave (c) Make Outsourcing Decision Binding Facilities Idle Another Product Variable Costs Enter any number in the edit fields and then continue to the next question. Requirement 2. 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 Wild Ride had produced the bindings. Show which alternative makes the best use of Wild Ride'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 whole dollar.) Buy (Outsource) Bindings Incremental Analysis (a) Make (b) Leave (c) Make Outsourcing Decision Binding Facilities Idle Another Product Variable Costs Plus: Fixed Costs Total cost of 1,890 bindings Less: Profit from another product Net cost Decision: Enter any number in the edit fields and then continue to the next question. (b) Leave (c) Make Incremental Analysis Outsourcing Decision Variable Costs (a) Make Binding Facilities Idle Another Product Plus: Fixe Total cosi Less: Pro Buy the bindings and use the facilities to make another product. Continue to make the bindings. Buy the bindings and leave the facilities idle. Net cost Decision: Enter any number in the edit fields and then continue to the next

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Construction Guide Accounting And Knowledge Based Audits

Authors: CPA Eric P. Wallace

1st Edition

0808020870, 978-0808020875

More Books

Students also viewed these Accounting questions