Exercise 12-7 Swifty 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. Swifty purchases sails at $263 each, but the company is considering using the excess capacity to manufacture the sails instead. The manufacturing cost per sail would be $93.89 for direct materials, $81.18 for direct labor, and $90 for overhead. The $90 overhead is based on $78,400 of annual fixed overhead that is allocated using normal capacity. The president of Swifty has come to you for advice. "It would cost me $265.07 to make the sails," she says, "but only $263 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).) Net Income Make Sails Buy Sails Increase (Decrease) Direct material $ $ Direct labor Variable overhead Purchase price Total unit cost Should Swifty make or buy the sails? Swifty should the sails. LINK TO TEXT VIDEO: APPLIED SKILLS