Make or Buy Decision. Reggie's Restaurant serves delicious pies made by Reggie's own cooks. The cost of each pie has been calculated as follows: Ingredients Electricity Labor Total $1.00 50 200 $450 Cooks are paid $9.00 per hour, and each pie requires about twenty minutes of a cook's time. The cooks are paid for eight hours work each day. Normally, they bake pies during the lull of business in the early afternoon. Akcal bakery has offered to sell pies to Reggie for $3.50 per pie. Reggie may accept the offer because he will save $1.00 per pic.

a. Is Reggie's analysis correct? Explain.

b. What other factors should Reggie consider?