Instead of sales of 10,000 pair of skis, revised estimates show sales volume at 12,500 pair. At this new volume, additional equipment, at an annual rental of $10,000 must be acquired to manufacture the bindings. This incremental cost would be the only additional fixed cost required even if sales increased to 30,000 pair. (This 30,000 level is the goal for the third year of production.) Under these circumstances, should the Minnetonka Corporation make or buy the bindings? Show calculations to support your answer. Can you tell me how I calculate this? I have no accounting experience and my book isn't helpful.

To determine whether Minnetonka Corporation should make or buy the bindings, you need to compare the costs of each option. Here's how you can calculate it:

1. Calculate the cost of making the bindings:
- Incremental fixed cost: $10,000 (annual rental for additional equipment)
- This cost remains the same even if sales increase to 30,000 pairs in the third year.

2. Calculate the cost of buying the bindings:
- Since the question does not provide the cost of buying the bindings, we cannot directly compare the costs. However, assume that there is a cost associated with buying the bindings, which we'll call "x."

3. Compare the costs:
- For sales of 10,000 pairs, the cost of making the bindings is $10,000 (incremental fixed cost).
- For sales of 12,500 pairs, the cost of making the bindings is still $10,000 (incremental fixed cost).
- Assuming the cost of buying the bindings is "x," you can compare the total costs of making and buying under these two sales volumes:
- Making cost: $10,000
- Buying cost: $x

4. Analyze the comparison:
- If the making cost is lower than the buying cost ($10,000 < $x), then it would be more cost-effective for Minnetonka Corporation to make the bindings.
- If the buying cost is lower than the making cost ($x < $10,000), then it would be more cost-effective for Minnetonka Corporation to buy the bindings.

Note: Without specific cost figures for buying the bindings, we cannot provide a definitive answer. However, the above calculations will assist in making the decision based on the given information and assumptions.