E7.7 Gibbs Company purchases sails and produces sailboats. It currently produces 1,200 sailboats per year, operating at nomal and produces sailboals. It currently produces 1,200 purchases sails at $250 each, but the comacity, which is about 80% of full capacity. Gibbs manufacture the sails instead. The manufacturing considering using the excess capacity to materials, $80 for direct labor, and $100 for orect would be $100 for direct $78,000 of annual fixed overhead and $100 for overhead. The $100 overhead is based on missed something," but only $250 to buy them. Should I continue buying them, or have I Instructions (a) Prepare a per unit analysis of the differential costs. Briefly explain whether Gibbs should make or buy the sails. (b) If Gibbs suddenly finds an opportunity to rent out the unused capacity of its factory for $77,000 per year, would your answer to part (a) change? Briefly explain. (c) Identify three qualitative factors that should be considered by Gibbs in this make-orbuy decision