Question: Please use the data table provied to answer both requirements. Wild Ride manufactures snowboards. Its cost of making 2,100 bindings is as follows: (Click the




Wild Ride manufactures snowboards. Its cost of making 2,100 bindings is as follows: (Click the icon to view the costs.) Suppose Toonotch will sell bindings to Wild Ride for $16 each. Wild Ride would pay $3 per unit to transport the bind pding. Data table Topnotch will enable the company ould make or buy the bindings. (On heses only when the cost of Wild Ride manufactures snowboards. Its cost of making 2,100 bindings is as follows: (Click the icon to view the costs.) Suppose Topnotch will sell bindings to Wild Ride for $16 each. Wild Ride would pay $3 per unit to transport the bindings to its manufacturing plant, where it would add its own logo at a cost of $0.70 per binding. Read the requirements. Requirement 1. Wild Ride's accountants predict that purchasing the bindings from Topnotch will enable the company to avoid $1,900 of fixed overhead. Prepare an analysis to show whether Wild Ride 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.) Requirement 2. The facilities freed by purchasing bindings from Topnotch can be used to manufacture another produc that will contribute $3,000 to profit. Total fixed costs will be the same as if Wild Ride had produced the bindings. Show which alternative makes the best use of Wild Ride's facilities. (Only enter the net relevant costs. Enter all costs as positive values. Use a minus sign or parentheses for decreases to net costs.) Variable Costs: Binding costs Bindings Idle Product Direct materials Direct labor Variable overhead Flxed costs Purchase price from Topnotch Transportation Logo Expected profit from new product Expected net cost of obtaining 2,100 bindings Which alternative makes the best use of Wild Ride's facilities? Decision: Variable Costs: Direct materials Direct labor Variable overhead Fixed costs Purchase Transpor Logo Buy the binding and leave the facilities idle. Expected Buy the binding and use the facilities to make the other product. Which alte Make the bindings. Decision
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