Diamond makes downhill ski equipment. Assume that comic has offered to produce ski poles for Diamond for $20 per pair Diamond needs 200,000 pairs of poles per period Diamond can only avoid 5150,000 of fixed costs if it outsources, the remaining fixed costs are unavoidable Diamond currently has the following costs at a production livel of 200,000 pairs of poles Click the icon to view the table 1 Should Diamond outsource ski pole production if the next best use of the freed capacity is to leave it idio? What effect will outsourcing have on Diamond's operating income? 2 If the freed capacity could be used to produce sk boots that would provide 51,660,000 of operating income, should Diamond outsource ski pole production? 1. Should Diamond outsource ski pole production if the next best use of the freed capacity is to love it ido? What effect will outsourcing have on Diamond's operating income? Bagn by preparing the incremental analysis for outsourcing decision (Use a munus sign or parentheses in the Difference column it the cost to make exceeds the cout to outsource Outsource Ski Incremental Analysis Outsourcing Decisions Make Ski Poles Poles Diference Variable costs Plus: Fixed costs Total cost of producing 200,000 pairs of poles 1 .) Data Table ki pole Jurcing have or used to source ski pol Manufacturing Costs Direct Materials Cost per pair Total Cost (200,000 pairs) $ 1,100,000 $ 5.50 190,000 0.95 1,120,000 5.60 1,300,000 6.50 Direct Labor ng have on Dia pole prod | analysis Variable MOH cost to make Fixed MOH $ 3.710.000 $ 18.55 Surcing D Total pairs of Print Done