Requirements 1. Mountain Rides' accountants predict that purchasing the bindings from the outside supplier will enable the company to avoid $2,000 of fixed overhead. Prepare an analysis to show whether the company should make or buy the bindings. 2. The facilities freed by purchasing bindings from the outside supplier can be used to manufacture another product that will contribute $3,300 to profit. Total fixed costs will be the same as if Mountain Rides had produced the bindings. Show which altemative makes the best use of Mountain Rides' facilities: (a) make bindings, (b) buy bindings and leave facilities idle, or (c) buy bindings and make another product. Print Done Data table $ 25,000 Direct materials Direct labor... Variable manufacturing overhead.... 83,000 50,000 83,000 Fixed manufacturing overhead $ 241,000 Total manufacturing costs... Cost per pair ($241,000 + 30,125) $ 8.00 Print Done Incremental Analysis Outsourcing Decision Variable Costs Plus: Fixed Costs Make Buy (Outsource) Bindings Bindings 158,000 $ 518,150 $ 83,000 Difference 360,150 Total cost of 30,125 bindings 241,000