Outdoor Fun manufactures snowboards. Its cost of making 1,880 bindings is as follows: (Click the icon...
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Outdoor Fun manufactures snowboards. Its cost of making 1,880 bindings is as follows: (Click the icon to view the costs.) Suppose an outside supplier will sell bindings to Outdoor Fun for $16 each. Outdoor Fun will pay $3.00 per unit to transport the bindings to its manufacturing plant, where it will add its own logo at a cost of $0.40 per binding. Read the requirements. Requirement 1. Outdoor Fun's accountants predict that purchasing the bindings from the outside supplier will enable the company to avoid $2,600 of fixed overhead. Prepare an analysis to show whether the company should make or buy the bindings. (Enter a "0" for any zero balances. Round any per unit amounts to the nearest cent and your final answers to the nearest whole dollar. Use a minus sign or parentheses in the Difference column when the cost to make exceeds the cost to buy.) Incremental Analysis Outsourcing Decision Variable Costs Plus: Fixed Costs Total cost of 1,880 bindings Enter any number in the edit fields and 3 parts remaining Make Bindings Data Table Buy (Outsource) Bindings Difference Direct materials Direct labor.... Variable manufacturing overhead..... Fixed manufacturing overhead ..... Total manufacturing costs... Cost per pair ($30,550 +1,880) S S ...... S 18,250 3,300 2,100 6,900 30,550 16.25 Requirements 1. Outdoor Fun's accountants predict that purchasing the bindings from the outside supplier will enable the company to avoid $2,600 of fixed overhead. Prepare an analysis to show whether the company should make or buy the bindings. if 2. The facilities freed by purchasing bindings from the outside supplier can be used to manufacture another product that will contribute $3,500 to profit. Total fixed costs will be the same Outdoor Fun had produced the bindings. Show which alternative makes the best use of Outdoor Fun's facilities: (a) make bindings, (b) buy bindings and leave facilities idle, or (c) buy bindings and make another product. Clear All Print Done Check Answer ? > Outdoor Fun manufactures snowboards. Its cost of making 1,880 bindings is as follows: (Click the icon to view the costs.) Suppose an outside supplier will sell bindings to Outdoor Fun for $16 each. Outdoor Fun will pay $3.00 per unit to transport the bindings to its manufacturing plant, where it will add its own logo at a cost of $0.40 per binding. Read the requirements. Requirement 1. Outdoor Fun's accountants predict that purchasing the bindings from the outside supplier will enable the company to avoid $2,600 of fixed overhead. Prepare an analysis to show whether the company should make or buy the bindings. (Enter a "0" for any zero balances. Round any per unit amounts to the nearest cent and your final answers to the nearest whole dollar. Use a minus sign or parentheses in the Difference column when the cost to make exceeds the cost to buy.) Incremental Analysis Outsourcing Decision Variable Costs Plus: Fixed Costs Total cost of 1,880 bindings Enter any number in the edit fields and 3 parts remaining Make Bindings Data Table Buy (Outsource) Bindings Difference Direct materials Direct labor.... Variable manufacturing overhead..... Fixed manufacturing overhead ..... Total manufacturing costs... Cost per pair ($30,550 +1,880) S S ...... S 18,250 3,300 2,100 6,900 30,550 16.25 Requirements 1. Outdoor Fun's accountants predict that purchasing the bindings from the outside supplier will enable the company to avoid $2,600 of fixed overhead. Prepare an analysis to show whether the company should make or buy the bindings. if 2. The facilities freed by purchasing bindings from the outside supplier can be used to manufacture another product that will contribute $3,500 to profit. Total fixed costs will be the same Outdoor Fun had produced the bindings. Show which alternative makes the best use of Outdoor Fun's facilities: (a) make bindings, (b) buy bindings and leave facilities idle, or (c) buy bindings and make another product. Clear All Print Done Check Answer ? >
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