part b - how much would net income decrease by?

Prepare a per unit analysis of the differential costs.(Round answers to 2 decimal places, eg. 15.75. Enter negative amounts using either a negative sign preceding the number eg.-45 or parentheses eg. (45)) Net Income Increase (Decrease) Make Sails Buy Sails $ Direct material Direct labor Variable overhead Purchase price Total unit cost 97.73 97.73 81.23 81.23 26,42 26.42 278 (278) 278 205.38 72.62 Should Riggs make or buy the sails? Riggs should makethe sails. eTextbook and Media Attempts: 3 of 7 used Your answer is partially correct. If Riggs suddenly finds an opportunity to rent out the unused capacity of its factory for $77200 per year, would your answer to part (a) change? No J .Thisis because the net income wicreaebys 199434 19,943.14 Riggs Company purchases sails and produces sailboats. It currently produces 1230 sailboats per year, operating at normal capacity, which is about 80% of full capacity. Riggs purchases sails at $278 each, but the company is considering using the excess capacity to manufacture the sails instead. The manufacturing cost per sail would be $97.73 for direct materials, $81.23 for direct labor, and $90 for overhead. The $90 overhead includes $78200 of annual fixed overhead that is allocated using normal capacity. The president of Riggs has come to you for advice. "It would cost me $268.96 to make the sails," she says, "but only $278 to buy them. Should I continue buying them, or have I missed something? Your answer is correct. Prepare a per unit analysis of the differential costs. (Round answers to 2 decimal places, eg. 15.75. Enter negative amounts using either a negative sign preceding the number eg.-45 or parentheses eg. (45)) Net Income Buy Sails Make Sails Increase (Decrease) 97.73 81.23 26.42 Direct material $ Direct labor Variable overhead Purchase price Total unit cost 97.73 81.23 26,42 278 205.38 72.62 Should Riggs make or buy the sails? Riggs should makethe sails