Question

Mountain Fun manufactures snowboards. Its cost of making 23,600 bindings is as follows: (Click the icon to view the costs.) S
boards - X S.) Data Table spor ell bind o at a Utrect materials Direct labor account show w al answer 24,000 82,000 48,000 82
Requirement 1. Mountain Funs accountants predict that purchasing the bindings from the outside supplier will enable the comp
ents Mountain Fun manufactures snowboards. Its cost of making 23,600 bindings is as follows: Click the icon to view the costs
Requirement 2. The facilities freed by purchasing bindings from the outside supplier can be used to manufacture another produ
Variable Costs Plus: Fixed Costs Total cost of 23,600 bindings Less: Profit from another product Net cost Decision:
Plus: Fixe Total cost Less: Prof Buy the bindings and use the facilities to make another product. Buy the bindings and leave
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Answer #1
Make Outsource Difference
Variable costs:
Direct Material 24,000 24,000
Direct Labor 82,000 82,000
Variable overhead 48,000 48,000
Fixed costs 2,000 2,000
Purchase Price 306,800 -306,800
Transportation 23,600 -23,600
Logo 4720 -4,720
Total differential cost 156,000 335,120 -179,120
Should MAKE
2.Comparison
Make Buy and Idle Buy and another product
Variable costs:
Direct Material 24,000
Direct Labor 82,000
Variable overhead 48,000
Fixed costs 2,000 2,000
Purchase Price 306,800 306,800
Transportation 23,600 23,600
Logo 4720 4720
Contribution to profit -3,200
Total differential cost 156,000 335,120 333,920
Continue to make
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