Sandhill Company purchases sails and produces sailboats. It currently produces 1,280 sailboats per year, operating at normal capacity, which is about 80% of full capacity. Sandhill purchases sails at $258 each, but the company is considering using the excess capacity to manufacture the sails instead. The manufacturing cost per sail would be $91 for direct materials, $87 for direct labor, and 590 for total manufacturing overhead. The $90 total manufacturing overhead includes $78,080 of annual fixed overhead that is allocated using normal capacity.

The president of Sandhill has come to you for advice. "It would cost me $268 to make the sails," she says, "but only $258 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 usinSandhill Company purchases sails and produces sailboats. It currently produces 1,280 sailboats per year, operating at normal capacity, which is about 80% of full capacity. Sandhill purchases sails at $258 each, but the company is considering using the excess capacity to manufacture the sails instead. The manufacturing cost per sail would be $91 for direct materials, $87 for direct labor, and 590 for total manufacturing overhead. The $90 total manufacturing overhead includes $78,080 of annual fixed overhead that is allocated using normal capacity.

The president of Sandhill has come to you for advice. "It would cost me $268 to make the sails," she says, "but only $258 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 number eg. -45 or parentheses eg: (45).)

Net Income Increase (Decrease) Make Sails Buy Sails Direct material $ $ $ Direct labor Variable overhead Purchase price Total unit cost $ $ $ Should Sandhill make or buy the sails? Sandhill should the sails.g either a negative sign preceding the number eg. -45 or parentheses eg: (45).)

Net Income Increase (Decrease) Make Sails Buy Sails Direct material $ $ $ Direct labor Variable overhead Purchase price Total unit cost $ $ $ Should Sandhill make or buy the sails? Sandhill should the sails.