Exercise 12-7 Indigo Company purchases sails and produces sailboats. It currently produces 1,250 sailboats per year, operating at normal capacity, which is about 80% of full capacity. Indigo purchases sails at $256 each, but the company is considering using the excess capacity to manufacture the sails instead. The manufacturing cost per sail would be $90.54 for direct materials, $89.54 for direct labor, and $90 for overhead. The $90 overhead is based on $78,500 of annual fixed overhead that is allocated using normal capacity. The president of Indigo has come to you for advice. "It would cost me $270.08 to make the sails," she says, "but only $256 to buy them. Should I continue buying them, or have I missed something?" Prepare a per unit analysis of the differential costs. (Round answers to 2 decimal places, e.g. 15.25. If amount decreases net income then enter the amount using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Make Sails Buy Sails Net Income Increase (Decrease) Direct material $ Direct labor Variable overhead Purchase price Total unit cost Should Indigo make or buy the sails? Indigo should the sails. If Indigo suddenly finds an opportunity to rent out the unused capacity of its factory for $78,000 per year, would your answer to previous part change? ). This is because the net income will by $