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

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.Prepare an analysis to show whether Krass should make or buy the bindings.

Question

Krass Snowboard Mfg.Inc.manufactures snowboards.Its cost of making 3,500 bindings is
as follows:
  
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.Prepare an analysis to show whether Krass should make or buy the bindings.

Quizplus · Accepted Answer

The Answer of Krass Snowboard Mfg.Inc.manufactures snowboards.Its cost of making 3,500 bindings is
as follows:
  
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.Prepare an analysis to show whether Krass should make or buy the bindings.