Riggs Company purchases sails and produces sailboats. It currently produces 1.220 sal boats 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. 580 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 Riges 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 ta) Your answer is correct Prepare a per unit analysis of the differential costs. (Enter negative amounts using either a negative sign preceding the number es. 45 or parentheses e.s. (451) Make Sails Buy Sails Net Inc Increase Direct vo material Direct labor Variable overhead Purchase price 26 Total unit cost 202 303 Should Riges make or buy the sails? Riggs should make the sails. eTextbook and Media Attempts 1 of 7 used Your answer is partially correct It Riges suddenly ands an opportunity to rent out the unused capacity of its factory for $78.000 per year, would your answer to partial change! Yes This is because the per income will increase by 5