work Question 10, T18-3 (similar to) HW Score: 85.49%, 8.55 of 10 points Part 3 of 4 Points: 0.5 of 1. Winter Sports makes downhill ski equipment. Assume that Atomic has offered to produce ski poles for Winter Sports for $19 per pair. Winter Sports needs 180,000 pairs of poles per period. of poles: Winter Sports can only avoid $200,000 of fixed costs if it outsources; the remaining fixed costs are unavoidable. Winter Sports currently has the following costs at a production level of 180,000 pairs (Click the icon to view the table.) 1. Should Winter Sports 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 Sports' operating income? 2. If the freed capacity could be used to produce ski boots that would provide $1,086,000 of operating income, should Winter Sports outsource ski pole production? 1. Should Winter Sports 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 Sports' 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.) Outsource Ski Incremental Analysis Outsourcing Decisions Make Ski Poles Poles Difference Variable costs: $ 2,304,000 3,420,000 $ 1,116,000 1080,000 880,000 200,000 Plus: Fixed costs 3,384,000 $ 4,300,000 $ 916,000 Total cost of producing 180,000 pairs of poles Winter Sports should not outsource production because its operating income would decline by $916,000 2. If the freed capacity could be used to produce ski boots that would provide $1,086,000 of operating income, should Winter Sports outsource ski pole production? Begin by preparing the incremental analysis for outsourcing decision if the freed capacity could be used to produce ski boots that would provide $1,086,000 of operating income. (Complete all input fields. Enter a "0" for any zero balances. Use a minus sign or parentheses in the Difference column if the cost to make exceeds the cost to outsource.) Make Ski Outsource Incremental Analysis Outsourcing Decisions Poles Ski Poles Difference Total cost of producing 180,000 pairs of poles (from Requirement 1) Less: Income from ski boots if outsource Net costwork Question 10, T18-3 (similar to) HW Score: 85.49%, 8.55 of 10 points Part 3 of 4 Points: 0.5 of 1. S Winter Sports makes downhill ski equipment. Assume that Atomic has offered to produce ski poles for Winter Sports for $19 per pair. Winter Sports needs 180,000 pairs of poles per period. Winter Sports can only avoid $200,000 of fixed costs if it outsources; the remaining fixed costs are unavoidable. Winter Sports currently has the following costs at a production level of 180,000 pairs of poles: (Click the icon to view the table.) 1. Should Winter Sports 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 Sports' operating income? 2. If the freed capacity cop Winter Sports outsource ski pole production? Data table 1. Should Winter Sports outso Cost per pair ect will outsourcing have on Winter Sports' operating income? Begin by preparing the incren Manufacturing Costs Total Cost (180,000 pairs) column if the cost to make exceeds the cost to outsource.) Direct Materials S 1,260,000 $ 7.00 Incremental Analysis O Direct Labor 126,000 0.70 Variable costs: Variable MOH 918,000 5.10 Plus: Fixed costs 1,080,000 6.00 Fixed MOH Total cost of producing 180 $ 3,384,000 $ 18.80 Total Winter Sports should not ou 2. If the freed capacity could ter Sports outsource ski pole production? Done Begin by preparing the increm Print ots that would provide $1,086,000 of operating income. (Complete all input fields, Enter a "0" for any zero eads the cost to outsource.) Incremental Analysis Outsourcing Decisions Poles Ski Poles Difference Total cost of producing 180,000 pairs of poles (from Requirement 1) Less: Income from ski boots if outsource Net cost