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Question 5 of 6 > View Policies 20 D Current Attempt in Progress Riggs Company purchases sails and produces sailboats. It currently produces 1.290
Question 5 of 6 > View Policies 20 D Current Attempt in Progress Riggs Company purchases sails and produces sailboats. It currently produces 1.290 uailboats per year operating a normal capacity which is about 80% of full capacity, Riggs purchases sails at $253 each, but the company is considering using the excess capacity to manufacture the sails instead. The manufacturing cost per sail would be $92 for direct materian S6 for direct labor, and $90 fur overhead. The $90 overhead is based on $78,690 of annual foed overhead that is allocated using normal capacity The president of Riggs has come to you for advice. "It would cost me $265 to make the sals" she says, "but only $253 to buy them Should I continue buying them, or have I missed something?" Prepare a per unit analysis of the differential costs. (Enter negative amounts using either a negative sign preceding the numbers-45 or parentheses eg (45)) Make Sails Buy Sails Net Income Increase (Decrease) Direct material $ $ Direct labor Variable overhead 355PM 02
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