Score: 0.38 of 1 pt 5 of 6 (5 complete) HW Score: 55.56%, 3.33 of 6 pts P8-52A (

Question

Score: 0.38 of 1 pt 5 of 6 (5 complete) HW Score: 55.56%, 3.33 of 6 pts P8-52A (similar to) Question Help Outdoor Life manufactures snowboards. Its cost of making 24,900 bindings is as follows: EEE (Click the icon to view the costs.) Suppose an outside supplier will sell bindings to Outdoor Life for $17 each. Outdoor Life will pay $1.00 per unit to transport the bindings to its manufacturing plant, where it will add its own logo at a cost of $0.60 per binding Read the requirements. Requirement 1. Outdoor Life'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 Outdoor Life should make or buy the bindings. (Enter a "O" 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 Buy (Outsource) Bindings Make Bindings Difference 463,140 S 81,400 544,540 $ 165,000 $ 298,140 (2,600) 295,540 Variable Costs Plus: Fixed Costs Total cost of 24,900 bindings Decision: Make the bindings. Requirement 2. The facilities freed by purchasing bindings from the outside supplier can be used to manufacture another product that vwill contribute $2,800 to profit. Total fixed costs will be the same as if 84,000 249,000 S Outdoor Life had produced the bindings. another product. (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.) Buy (Outsource) Bindings Enter any number in the edit fields and then click Check Answer Clear All Check Answer 3:05 AM O Type here to search PrtScn Home 10 5 6 8 9

Explanation / Answer

1

Req 2

Make Buy Difference variable cost 165000 463140 298140 Fixed cost 84000 81400 -2600 Total Cost of 24900 Binding 249000 544540 295540

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.