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X P25-25A (similar to) Question Help X-Perience manufactures snowboards. Is cost of making 2,000 bindings is as follows: (Click the icon to view the costs) Suppose Livingston will sell bindings to X-Perience for $13 each. X-Perience would pay 51 per unit to transport the bindings to its manufacturing plant, where it would add its own logo at a cost of $0.60 per binding Read the requirements Requirement 1. X-Perine's accountants predict that purchasing the bindings from Livingston will enable the company to avoid $1,000 of fixed overhead. Prepare an analysis to show whether X-Perience should make or buy the bindings (Only enter the net relevant costs. For the Difference column, use a minus sign or parentheses only when the cost of outsourcing exceeds the cost of making the bindings in-house.) Make Outsource Difference Binding costs Bindings Bindings (Make-Outsource) Variable costs Direct materials Direct labor Variable overhead Faxed costs Purchase price from Livingston Transportation Logo Total differential cost of 2,000 bindings Outsource Bindings Facilities Make New Make Binding costs Bindings Idle Product Variable Costs: Direct materials Direct labor Variable overhead Fixed costs Purchase price from Hemingway Transportation Logo Expected profit from new product Expected net cost of obtaining 2,000 bindings Id pay $1 per unit to transport the bindings to its manufacturing plant, where it m Livingston will enable the company to avoid $1,800 of fixed overhead. Prepa arentheses only when the cost of outsourcing exceeds the cost of making the - Data Table Direct materials Direct labor 17,570 2,700 2,030 6,700 Variable overhead Fixed overhead Total manufacturing costs for 2,000 bindings 29,000 Print Done Clear All the bindings from Livingston will enable the company to avoid $1,800 of fixed overhead. Prepare an analysis to minus sign or parentheses only when the cost of outsourcing exceeds the cost of making the bindings in-house A Requirements 1. X-Perience's accountants predict that purchasing the bindings from Livingston will enable the company to avoid $1,800 of fixed overhead. Prepare an analysis to show whether X-Perience should make or buy the bindings. 2. The facilities freed by purchasing bindings from Livingston can be used to manufacture another product that will contribute $3,300 to profit. Total fixed costs will be the same as if X-Perience had produced the bindings. Show which alternative makes the best use of X-Perience's facilities: (a) make bindings, (b) buy bindings and leave facilities idle, or (c) buy bindings and make another product. Print Done

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