X-Perience manufactures snowboards. Its cost of making 2,100 bindings is as follows: (Click the icon to view the costs.) Suppose Lewis will sell bindings to X-Perience for $14 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 $0.60 per binding Read the requirements Requirement 1. X-Perience's accountants predict that purchasing the bindings from Lewis 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: Direct materials Direct labor Variable overhead Fixed costs Purchase price from Lewis Transportation Logo Total differential cost of 2,100 bindings Make Outsource Difference Bindings Bindings (Make-Outsource) Requirements 1. X-Perience's accountants predict that purchasing the bindings from Lewis 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 Lewis can be used to manufacture another product that will contribute $2,800 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. Data table Direct materials $ 17.500 Direct labor 2.900 Variable overhead 2.040 6,800 Fixed overhead Total manufacturing costs for 2,100 $ 29.240 bindings