Chapter 25, Problem P25.25APGA

To determine

Make or buy decision:

Making a decision, whether to manufacture or buy the product from another manufacture is called a make or buy decision. The decision is made based on cost incur on the product.

To determine:

1. The preparation of analysis to show whether Snow Ride should make or buy the bindings.

2. Which alternative makes the best use of Snow Ride’s facilities?

a. Make bindings.

b. Buy the bindings and leave facilities idle.

c. Buy bindings and make another product.