X-Perience manufactures snowboards. Its cost of making 1,700 bindings is as follows: (Click the icon to view the costs.) Suppose Witherspoon will sell bindings to X-Perience for $12 each. X-Perience would pay $3 per unit to transport the bindings to its manufacturing plant, where it would add its own logo at a cost of $0.70 per binding. Read the requirements. Requirement 1. X-Perience's accountants predict that purchasing the bindings from Witherspoon will enable the company to avoid $2,100 of fixed overhead. Prepare an analysis to show whether X-Perience should make or buy the bindings. (Only enter the net relevant costs. For the Difference column, use a minus sign or parentheses only when the cost of outsourcing exceeds the cost of making the bindings in-house.) Binding costs Variable costs: Make Bindings Outsource Bindings Difference (Make-Outsource) Data table Direct materials Direct labor Variable overhead Fixed costs Purchase price from Witherspoon Transportation Logo Total differential cost of 1,700 bindings Requirements Direct materials $ 17,510 Direct labor 3,200 Variable overhead 2,090 Fixed overhead 6,800 $ 29,600 Total manufacturing costs for 1,700 bindings 1. X-Perience's accountants predict that purchasing the bindings from Witherspoon will enable the company to avoid $2,100 of fixed overhead. Prepare an analysis to show whether X-Perience should make or buy the bindings. 2. The facilities freed by purchasing bindings from Witherspoon can be used to manufacture another product that will contribute $2,900 to profit. Total fixed costs will be the same as if X-Perience had produced the bindings. Show which alternative makes the best use of X-Perience's facilities: (a) make bindings, (b) buy bindings and leave facilities idle, or (c) buy bindings and make another product. Print Done Print Done