Question: Please show answer Entire Screen! Data Table Direct materials $ 17,520 Direct labor 2,700 Variable overhead 2,080 6,600 Fixed overhead $ 28,900 Total manufacturing costs



Data Table Direct materials $ 17,520 Direct labor 2,700 Variable overhead 2,080 6,600 Fixed overhead $ 28,900 Total manufacturing costs for 1,800 bindings C Print Done Mountain Fun manufactures snowboards. Its cost of making 1,800 bindings is as follows: Click the icon to view the costs.) Suppose Witherspoon will sell bindings to Mountain Fun for $16 each. Mountain Fun would pay $2 per unit to transport the bindings to its manufacturing plant, where it would add its own logo at a cost of $0.50 per binding. Read the requirements Requirement 1. Mountain Fun's accountants predict that purchasing the bindings from Witherspoon will enable the company to avoid $2,400 of fixed overhead Prepare an analysis to show whether Mountain Fun 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) Make Outsource Difference Binding costs Bindings Bindings (Make-Outsource) Variable costs Direct materials Direct labor Variable overhead Fixed costs Purchase price from Witherspoon Transportation Logo Total differential cost of 1,800 bindings Should Mountain Fun make or buy the bindings? Decision TELE Requirement 2. The facilities freed by purchasing bindings from Witherspoon can be used to manufacture another product that will contribute $2,600 to profit. Total fixed costs will be the same as if Mountain Fun had produced the bindings. Show which alternative makes the best use of Mountain Fun's facilities. (Only enter the net relevant costs. Enter all costs as positive values. Use a minus sign or parentheses for decreases to not costs.) Outsource Bindings Make Facilities Make New Binding costs Bindings Idle Product Variable Costs: Direct materials Direct labor Variable overhead Fixed costs Purchase price from Witherspoon Transportation Logo Expected profit from new product Expected profit from new product Expected net cost of obtaining 1,800 bindings Which alternative makes the best use of Mountain Fun's facilities? Decision
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