Question 6 Riggs Company purchases sails and produces sailboats. It currently produces 1,220 sailboats per year, operating at normal capacity, which is about 80% of full capacity. Riggs purchases sails at $261 each, but the company is considering using the excess capacity to manufacture the sails instead. The manufacturing cost per sail would be $96 for direct materials, $80 for direct labor, and $90 for overhead. The $90 overhead is based on $78,080 of annual fixed overhead that is allocated using normal capacity. The president of Riggs has come to you for advice. "It would cost me $266 to make the sails," she says, "but only $261 to buy them. Should I continue buying them, or have I missed something?" (a) 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).) Net Income Increase (Decrease) Make Sails Buy Sails Direct material $ $ $ Direct labor Variable overhead Purchase price Total unit cost $ $ Should Riggs make or buy the sails? the sails Riggs should By accessing this Question Assistance, you will learn while you earn points based on the Point Potential Policy set by your instructor. Attempts: 0 of 3 used SUBMIT ANSWER SAVE FOR LATER