$($Click the icon to view the costs.$)$

Read the requirements.

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.$)$

Decision

alternative makes the best use of Winter Sports' facilities. $($Only enter the net relevant costs. Enter all costs as positive values. Use a minus sign or parentheses for decreases to net costs.$)$

Requirements

Winter Sports' accountants predict that purchasing the bindings

from Hemingway will enable the company to avoid $$2,000$ of fixed

overhead. Prepare an analysis to show whether Winter Sports

should make or buy the bindings.

The facilities freed by purchasing bindings from Hemingway 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.