View the costs

Rayonna Ross

This question: $1$ point$($s$)$ possible

Submitc

Read the requirements.

Incremental Analysis Outsourcing

Requirement $2.$ The facilities freed by purchasing bindings from the outside supplier can be used to manufacture another product that will contribute $32,600$ to pro

Buy $($Outsource$)$ Bindings

$($b$)$ Leave Facilities $($c$)$ Make Another Idle Product

$$

$($a$)$ Make Binding

$$

Variable Costs

$[$ Incremental Analysis Outsourcing $],[q,\{\begin{array}{ccc}\text{:}& \text{D}\text{e}\text{c}\text{i}\text{s}\text{i}\text{o}\text{n}& \end{array}]$

Plus: Fixed Costs

Total cost of $1,880$ bindings

Less: Profit from another product

let cost

Plus: Fixed Costs

Total cost of $1,880$ bindings

Less: Profit from another product

Net cost

Plus: Fixed Costs

Total cost of $1,880$ bindings

Less: Profit from another product

Net cost

Decision:

Plus: Fixed Costs

Total cost of $1,880$ bindings

Less: Profit from another product

Net cost

Decision:

Plus: Fixed Costs

Total cost of $1,880$ bindings

Less: Profit from another product

Net cost

Decision:

$$

Costs

$\backslash$table$[[$Direct materials$],[$Direct labor.,$18\mathrm{.}250],[$Variable manufa,$3,300],[$Fixed manufacturing overing overh,$2,100],[$Total mate,$6\mathrm{.}900],[$Cotal manufacturing costs,$30\mathrm{.}550],[$Cost per pair $($$$30,5501,880),30\mathrm{.}550],[,16\mathrm{.}25]]$

Requirements

Outdoor Fun's accountants predict that purchasing the bindings from the outside supplier will enable the company to avoid $$1,800$ of fixed overhead. Prepare an analysis to show whether the company should make or buy the bindings.

The facilities freed by purchasing bindings from the outside supplier can be used to manufacture another product that will contribute $$2,600$ to profit. Total fixed costs will be the same as if 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 idil

bindings and make another product. Outdoor Fun's facilities: $($a$)$ make bindings.