Fixed costs are primarily the depreciation on kitchen equipment such as ovens and mixers. Topaz expects to retain the equipment. Topaz can buy the cakes for $21. Topaz Company makes decorative wedding cakes. The company is considering buying the cakes rather than baking them, which will allow it to concentrate on decorating. The company averages 100 wedding cakes per year and incurs the following costs from baking wedding cakes: (Click the icon to view the costs.) 11. 12. Should Topaz make the cakes or buy them? Why? If Topaz decides to buy the cakes, what are some qualitative factors that Topaz should also consider? 11. Should Topaz make the cakes or buy them? Why? (For the Difference column, use a minus sign or parentheses only when the cost of outsourcing exceeds the cost of making the cakes in-house.) Make Outsource Difference Cake costs cakes cakes (make-outsource) Variable costs: Data Table - Direct materials Direct labor Variable manufacturing overhead Direct materials $ 675 Purchase cost 750 175 Total differential cost of cakes Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total manufacturing cost 1,125 Topaz V continue to make the cakes. Outsourcing will $ 2,725 100 12. If Topaz decides to buy the cakes, what are some qualitative factors that Topaz should also consider? Number of cakes 1 $ 27 Cost per cake O A. Qualitative factors include separating fixed and variable costs. OB. Qualitative factors include considering sunk costs and manager's opinions. OC. Qualitative factors include quality and on-time delivery. OD. Qualitative factors include contribution margins of the various products produced. Print Done