Exercise 12-7 Riverbed Company purchases sails and produces sailboats. It currently produces 1,240 sailboats per year, operating at normal capacity, which is about 80 % of full capacity. Riverbed purchases sails at $265 each, but the company is considering using the excess capacity is bas manufacture the sails instead. The manufacturing cost per sail would be $90.89 for direct materials, $85.48 for direct labor, and $$90 for overhead. The $90 overhead is allocated using normal capacity. annual fixed overhead t $78,000 The president of Riverbed has come to you for advice. "It would cost me $266.37 make the sails." she savs, "but only $265 buy them. Should I continue buying them, have I missed something?" Prepare a per unit analysis of the differential costs. (Round answers to 2 decimal places, e.g. 15.25. number e.g. -45 famount decreases net income then enter the amount using either a negative sign preceding the -parentheses e.q. (45).) Net Income Make Sails Increase (Decrease) Buy Sails Direct material Direct labor Variable overhead Purchase price Total unit cost Should Riverbed make or buy the sails? the sails. Riverbed should make buy LTNK TO TEYT If Riverbed suddenly finds an opportunity to rent out the unused capacity of its factory for $77,800 per year, would your answer to previous part change? by $ This is because the net income will