i Requirements 1. What is the full product unit cost of making the bread in-house? 2. Should Seafood House bake the bread in-house or buy from the local bakery? Why? 3. In addition to the financial analysis, what else should Seafood House consider when making this decision? Print Done Suppose Seafood House restaurant is considering whether to (1) bake bread for its restaurant in-house or (2) buy the bread from a local bakery. The chef estimates that variable costs of making each loaf include $0.62 of ingredients, $0.18 of variable overhead (electricity to run the oven), and $0.72 of direct labor for kneading and forming the loaves. Allocating fixed overhead (depreciation on the kitchen equipment and building) based on direct labor, Seafood House assigns $0.99 of fixed overhead per loaf None of the fixed costs are avoidable. The local bakery would charge $1.74 per loaf. Read the requirements Requirements 1. What is the unit cost of making the bread in-house? Complete the following outsourcing decision analysis to determine Seafood House's unit cost of making the bread. Seafood House Outsourcing Decision Direct material Direct labor Variable overhead Variable cost per unit Plus: Fixed overhead per unit Cost per unit Requirement 2. Should Seafood House bake the bread in-house or buy from the local bakery? Why? of making each loaf is the cost of outsourcing each Since the Decision: loat Requirement 3. In addition to the financial analysis, what else should Seafood House consider when making this decision? Seafood House should consider the following qualitative factors before making a final decision: O A. Will the local bakery meet their delivery time requirements? OB. How does the quality and freshness of the local bakery bread compare to Seafood House bread? OC. Both A and B OD. None of the above the cost of outsourcing each Requirement 2. Should Seafood House bake the bread in-house or buy from the local bakery? Why? Decision: since the of making each loaf is loat Requirem Seafood House should bake the broad in-house House consider when making this decision? Seafood Seafood House should buy the bread from the local bakery a final decision: OA Will the local bakery meet their delivery time requirements? O B. How does the quality and freshness of the local bakery bread compare to Seafood House bread? OC. Both A and B OD. Norve of the above the cost of outsourcing each Requirement 2. Should Seafood House bake the bread in-house or buy from the local bakery? Why? Decision since the of making each loaf is loat Requirement 3. In addition to the financial analysis, what else should Seafood Ha fixed cost aking this decision? Seafood House should consider the following qualitative factors before making af full cost variable cost O A. W the local bakery meet their delivery time requirements? OB. How does the quality and freshness of the local bakery bread compare to Seafood House bread? OC. Both A and B OD. None of the above Requirement 2. Should Seafood House bake the bread in-house or buy from the local bakery? Why? the cost of outsourcing each Decision: y since the of making each loaf is loat Requirement 3. In addition to the financial analysis, what else should Seafood House consider when making this decisi Seafood House should consider the following qualitative factors before making a final decision: greater than less than le es A. Will the local bakery meet their delivery time requirements? OB. How does the quality and freshness of the local bakery bread compare to Seafood House bread? C. Both A and B D. None of the above