Winter sports manufactures snowboards. Its cost of making 1,700 bindings is as follows:

Suppose monroe will sell bindings to winter sports for $13 each. Winter sports would pay $2 per unit to transport the bindings to its manufacturing plant, where it would add its own logo at a cost of .50 cent per binding.

Data table $ Direct materials Direct labor Variable overhead Fixed overhead 17,570 2,700 2.120 7,000 $ 29,390 Total manufacturing costs for 1,700 bindings Requirements 1. Winter Sports' accountants predict that purchasing the bindings from Monroe will enable the company to avoid $1,900 of fixed overhead. Prepare an analysis to show whether Winter Sports should make or buy the bindings. 2. The facilities freed by purchasing bindings from Monroe can be used to manufacture another product that will contribute $3.100 to profit. Total fixed costs will be the same as if Winter Sports had produced the bindings. Show which alternative makes the best use of Winter Sports' facilities: (a) make bindings, (b) buy bindings and leave facilities idle, or (c) buy bindings and make another product. Make Outsource Bindings Difference (Make-Outsource) Bindings Binding costs Variable costs: Direct materials Direct labor Variable overhead Fixed costs Purchase price from Monroe Transportation Logo Total differential cost of 1,700 bindings