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Mountain Sports manufactures snowboards. Its cost of making 23,600 bindings is as follows: (Click the loon to view the costs) Suppose an outside supplier will sell bindings to Mountain Sports for $12 each. Mountain Sports will pay $2.00 per unit to transport the bindings to its manufacturing plant, where it will add its own logo at a cost of $0.30 per bil Read the requirements
Data table Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead .. Total manufacturing costs ... Cost per pair ($236,000 ÷ 23,600) .... $ **** 24,000 82,000 48,000 82,000 $ 236,000 10.00 ..$
- Requirements 1. Mountain Sports' 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 $2,600 to profit. Total fixed costs will be the same as Mountain Sports had produced the bindings. Show which alternative makes the best use of Mountain Sports' facilities: (a) make bindings, (b) buy bindings and leave facilities idle, or (c) buy bindings and make another product.
Regiment 1. Mountain Sports 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 whould make or buy the any zaro tances 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 s makes the Incremental Analysis Outuring Decision Make Bindings Buy (Outsource) Bindings Difference
Requirement 2. The tactes teed by purchasing bindings from the outside suppiler can be used to manufacture another product that will contribute $2,500 to profit. Total fixed costs will be the same as if Mountain Sports had produce the tindings Show which alterative makes the best use of Mountain Sports facilities: (a) make bindings, (b) buy bindings and leave facilities ide, or (c) buy bindings and make another product (Entra for any re cert and your final answers to the neare whole dolar) Buy (Outsource) Bindings (b) Leave antal Analysis Outsourcing Decision (a) Make Binding Vari Cont Phe Fixed Coste Lase Profit from the pro Facilities (c) Make Another Product