If Riggs suddenly finds an opportunity to rent out the unused capacity of its factory for $77,500 per year, would your answer to part (a) change? Yes O This is because the net income will Increase by $ Riggs Company purchases sails and produces sailboats. It currently produces 1,210 sailboats per year, operating at normal capacity, which is about 80% of full capacity. Riggs purchases sails at $254 each, but the company is considering using the excess capacity to manufacture the sails instead. The manufacturing cost per sail would be $93 for direct materials, $87 for direct labor, and $90 for overhead. The $90 overhead is based on $78,650 of annual fixed overhead that is allocated using normal capacity. The president of Riggs has come to you for advice. "It would cost me $270 to make the sails," she says, "but only $254 to buy them. Should I continue buying them, or have I missed something?" (a) Your answer is correct. Prepare a per unit analysis of the differential costs. (Enter negative amounts 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 93 i 93 Direct labor 87 87 Variable overhead 25 i 25 Purchase price Total unit cost 205 0 254 -254 254 i -49