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Winter Fun makes downhill ski equipment. Assume that Atomic has offered to produce ski poles for Winter Fun for $19 per pair. Winter Fun needs 130,000 pairs of poles per period. Winter Fun can only avoid $160,000 of fixed costs if it outsources; the remaining fixed costs are unavoidable. Winter Fun currently has the following costs at a production level of 130,000 pairs of poles: (Click the icon to view the table.) 1. Should Winter Fun outsource ski pole production if the next best use of the freed capacity is to leave it idle? What effect will outsourcing have on Winter Fun's operating income? If the freed capacity could be used to produce ski boots that would provide $1,024,500 of operating income, should Winter Fun outsource ski pole production? 2. 1. Should Winter Fun outsource ski pole production if the next best use of the freed capacity is to leave it idle? What effect will outsourcing have on Winter Fun's operating income? Begin by preparing the incremental analysis for outsourcing decision. (Use a minus sign or parentheses in the Difference column if the cost to make exceeds the cost to outsource.) Outsource Ski Incremental Analysis Outsourcing Decisions Make Ski Poles Poles Difference Variable costs: 2470000 Plus: Fixed costs Total cost of producing 130,000 pairs of poles Winter Fun outsource production because its operating income would 2. If the freed capacity could be used to produce ski boots that would provide $1,024,500 of operating income, should Winter Fun outsource ski pole production? Begin by preparing the incremental analysis for outsourcing decision if the freed capacity could be used to produce ski boots that would provide $1,024,500 of operating income. (Complete all input fields. Enter a "0" for any zero balances. Use a minus sign or parentheses in the Difference column if the cost to make exceeds the cost to outsource.) Incremental Analysis Outsourcing Decisions Make Ski Poles Outsource Ski Poles Difference Total cost of producing 130,000 pairs of poles (from Requirement 1) Less: Income from ski boots if outsource Net cost If the freed capacity could be used to produce ski boots that would provide $1,024,500 of operating income, Winter Fun outsource its ski pole production because its operating income would 2470000 i Data Table uld Manufacturing Costs 024,9 Cost per pair Total Cost (130,000 pairs) $ 650,000 $ 5.00 Direct Materials b income. (Comp capad st to o Direct Labor 97,500 0.75 M Variable MOH 5.60 728,000 793,000 6.10 Fixed MOH $ 2,268,500 $ 17.45 Total Print Done 4,500 Jecause its opera

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