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Outdon Lite manufactures snowboards. lis cost of making 1,900 bindings is as follows (Click the icon to view the costs.) Suppose Topnotch will sel bindings to Outdoor Life for $16 each. Outdear Lifo would pay $2 per unit to transport the bindings to its manudacturing plant, where it would atd it own logo at a cost of 50 . 40 per binding Read the requitements Requirements 1. Outdoor Life's accountants predict that purchasing the bindings from Topnotch will enable the company to avoid $1,900 of fixed overhead. Prepare an analysis to show whether Outdoor Life should make or buy the bindings. 2. The facilities freed by purchasing bindings from Topnotch can be used to manufacture another product that will contribute $3,200 to profit. Total fixed costs will be the same as if Outdoor Life had produced the bindings. Show which alternative makes the best use of Outdoor Life's facilities: (a) make bindings, (b) buy bindings and leave facilities idle, or (c) buy bindings and make another product. Data table Should Outdoor Life make or buy the bindings? Decision Variable Costs: Binding costs Bindings Idle Product Direct materials Direct labor Variable overhead Fixed costs Purchase price from Topnotch Transportation Logo Expected profit from new product Expected net cost of obtaining 1,900 bindings Which atternative makes the best use of Outdoor Lile's facilities? Decision

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