SKI PRO CORPORATION

Ski Pro Corporation

Ski Pro Corporation

Answer 1

From the given calculations, it is better that the company makes the bindings since if they make the bindings, the contribution margin would be $ 10 per pair, while if the bindings were subcontracted, the contribution margin would be $ 9.5 per pair.

Maximum purchase price for binding:

Maximum price for binding (10.5 - 1) that is $ 9.50. Moreover, if we produce we have to bear loss of $ 100,000, if we gave to binding we have to bear additional $ 10,000 also. So making is the best decision. For that reason, for making ...