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Mountain SportsMountain Sports manufactures snowboards. Its cost of making 19,000 bindings is as follows:

Direct materials. . . . . . . . . . . . . . . . . . . . . . . . . . .

$22,000

Direct labor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

81,000

Variable manufacturing overhead. . . . . . . . . . . . . .

44,000

Fixed manufacturing overhead. . . . . . . . . . . . . . . .

81,000

Total manufacturing costs. . . . . . . . . . . . . . . . . . . .

$228,000

Cost per pair ($228,000 / 19,000). . . . . . . . . . . . . .

$12.00

Mountain SportsMountain Sports for $15 each.Mountain SportsMountain 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

$0.50 per binding.Read the requirements

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Requirement 1.

Mountain Sports'Mountain Sports'

accountants predict that purchasing the bindings from the outside supplier will enable the company to avoid

$ 2 comma 600$2,600

of fixed overhead. Prepare an analysis to show whether

Mountain SportsMountain Sports

should make or buy the bindings. (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. Use a minus sign or parentheses in the Difference column when the cost to make exceeds the cost to buy.)

Incremental Analysis	Make	Buy (Outsource)
Outsourcing Decision	Bindings	Bindings	Difference
Variable Costs
Plus: Fixed Costs
Total cost of 19,000 bindings

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