Author Question: Krass Snowboard Mfg. Inc. manufactures snowboards. Its cost of making 3,500 bindings isas ... (Read 28 times)

jerry coleman · **on:** Jan 4, 2020

Krass Snowboard Mfg. Inc. manufactures snowboards. Its cost of making 3,500 bindings is
as follows:

Direct materials

$32,000

Direct labour

6,200

Variable manufacturing overhead

4,500

Fixed manufacturing overhead

13,300

Total manufacturing costs

$56,000

Suppose O'Brien will sell bindings to Krass for $15 each. Krass will pay $1.50 per unit to transport the bindings to its manufacturing plant, where it will add its own logo at a cost of $0.80 per binding. Krass' accountants predict that purchasing the bindings from O'Brien will enable the company to avoid $5,500 of fixed overhead. The facilities freed by purchasing bindings from O'Brien can be used to manufacture another product that will contribute $6,500 to profit. Total fixed costs will be the same as if Krass had produced the bindings. Show which alternative makes the best use of Krass' facilities: (a) make bindings, (b) buy bindings and leave facilities idle, or (c) buy bindings and make another product.

jesse.fleming · **Reply #1 on:** Jan 4, 2020

A FREE account is required to view all solutions!

Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.

Answer Preview

Only 26% of students answer this correctly