S8-11 (similar to) Question Help Suppose an Olive Terrace restaurant is considering whether to (t) bake bread for ts restaurant in-house or (2) buy the bread from a local bakery. The chef ostimates that variable costs of making each loatincode $0.50 of ingredients. $0 21 of variable overhead (electricity to run the oven), and $0.74 of direct labor for reading and forming the loaves. Allocating fixed overhead (depreciation on the kitchen equipment and building) based on direct labor assigns $104 of fixed overhead perfoat. None of the food costs are avoidable. The local bakery would charge Olive Terrace $1.75 por lo 1. What is the absorption cost of making the bread in-house? What is the variable cost perfor? 2. Should Olive Terrace bake the bread in-house or buy from the local bakary? Why? 3. In addition to the financial analysis, what else should live Terrace consider when making this decision? 1. What is the absorption cost of making the broad in house? What is the variable cost perica? Olive Terrace Outsourcing Decision (Absorption Costing) Vurable cost per la Picou por lo Choco From Oteronume in the routes and then click Check Answe Cler Check A 2 pm Question Help Cocoate processes cocoa beans into ocoa powder at a processing cost of $10,000 per botch Cocoalite can sell the cocoa powder as is. or it can process the cocoa powder further into chocolate or boxed assorted chocolates. Once processed, each batch of cocoa beans would result in the following sales revenues Click the icon to view the sales revenue. The cost of transforming the cocoa powder into chocolate syrup would be $70,000. Likewise, the company would incut $175,000 to transform the cocoa powder into boxed assorted chocolats. The company president has decided to make boxed assorted chocolates owing to its high sales value and to the fact that the $10.000 cost of processing cocoa beans *eats up most of the cocoa powder profits. Has the president made the right or wrong decision? Explain your answer Complete the following incremental analysis to compare selling the cocoa powder as is with processing it further. (Enter a o" for any zero amounts) Sell as Sellas Boxed Chocolate Assorted Powder Syrup Choco Solas Not bent ng decision? Explain your answer. compare selling the cocoa powder as is with processing it further. (Enter a "0" for any zero amounts Sell as Cocoa * Data Table Powder Cocoa powder $ 15,000 ---- Chocolate syrup $ 103,000 Boxed assorted chocolates $ ---- 194,000 Print Done the input fields and then click Check