Riggs Company purchases sails and produces sailboats. It currently produces $1,230$ sailboats per year, operating at normal capacity, which is about $80\%$ of full capacity. Riggs purchases sails at $$255$ each, but the company is considering using the excess capacity to manufacture the sails instead. The manufacturing cost per sail would be $$94$ for direct materials, $$80$ for direct labor, and $$90$ for overhead. The $$90$ overhead is based on $$78,720$ of annual fixed overhead that is allocated using normal capacity.

The president of Riggs has come to you for advice. $"$It would cost me $$264$ to make the sails," she says, "but only $$255$ 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$.(45).)$

Should Riggs make or buy the sails?

Riggs should

the sails.