Suppose a Roasted Olive reslaurant is considering whother to (1) bake bread for its-restaurant in-house or (2) buy the bread from a local bakery. The chef estimates that variable cosis of making each loaf include $0.52 of ingredients, $0.24 of variable overhead (electricity to fun the owen), and 50.78 of direct labor for knesing and forming the loaves, Alocating foxed overhead (depreciation on the kitchen equipment and building) based on direct labor assigns $1.04 of fixed overhead per iagf. None of the fixed costs are avoidable. The local bakery wosild charge Roasted Ollve $1.78 per loaf. 1. What is the absorption cost of making the bread in-house? What is the variable cost per loaf? 2. Should Roasted Oive bake the bread in-house or buy from the local bakery? Why? 3. In addition to the financial analysis, what else should Roasted Olive consider when making this decision? 1. What is the absorption coat of making the bread in-house? What is the variable cost per loaf