Winter Sports manufactures snowboards. Its cost of making 1,890 bindings is as follows: E: (Click the icon to view the costs.) Suppose an outside supplier will sell bindings to Winter Sports for $14 each. Winter Sports 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 $0.20 per binding. Read the requirements Requirement 1. Winter Sports' accountants predict that purchasing the bindings from the outside supplier will enable the company to avoid $2,400 of fixed overhead. Prepare an analysis to show whether the company should make or buy the bindings. (Enter a "O" 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.) Make Incremental Analysis Outsourcing Decision Buy (Outsource) Bindings Bindings Difference Variable Costs Plus: Fixed Costs Total cost of 1,890 bindings Decision Requirement 2. The facilities freed by purchasing bindings from the outside supplier can be used to manufacture another product that will contribute $3,500 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. (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 (a) Make (b) Leave (c) Make Incremental Analysis Outsourcing Decision Binding Facilities Idle Another Product Variable Costs Plue. Fived Caete Enter any number in the edit fields and then continue to the next question. ? Winter Sports 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 Winter Sports for $14 each. Winter Sports 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 $0.20 per binding. Read the requirements Plus: Fixed Costs Total cost of 1,890 bindings Decision Requirement 2. The facilities freed by purchasing bindings from the outside supplier can be used to manufacture another product that will contribute $3,500 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. (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 (b) Leave (c) Make (a) Make Incremental Analysis 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 Winter Sports 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 Winter Sports for $14 each. Winter Sports 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 $0.20 per binding. Read the requirements Plus: Fixed Costs x i Total cost of 1,890 bindings Data Table Decision 7 Direct materials. $ 18,000 Requirement 2. The facilities freed by purchasing bindings from the outside supplier can be use alternative makes the best use of Winter Sports' facilities: (a) make bindings, (b) buy bindings ar final answers to the nearest whole dollar.) Total fixed costs will be the same as if Winter Sports had produced the bindings. Show which Enter a "0" for any zero balances. Round any per unit amounts to the nearest cent and your Direct labor... 3,200 Variable manufacturing overhead Fixed manufacturing overhead 2,340 6,700 (a) Make Incremental Analysis Outsourcing Decision Buy (Outsource) Bindir (b) Leave (c) M Facilities Idle Another $ 30,240 Binding Total manufacturing costs. Cost per pair ($30,240 = 1,890) $ 16.00 Variable Costs Plus: Fixed Costs Total cost of 1,890 bindings Print Done Done Less: Profit from another product Net cost Decision
