Suppose a Roasted Olive restaurant is considering whether to (1) bake bread for its restaurant in house or (2) buy the bread from a local bakery Tho chef estimates that variable costs of making each loaf include $0 54 of ingredients, 50 21 of variable overhead (electricity to run the oven) and 50 73 of direct labor for kneading and forening the loaves. Allocating fixed overhead (depreciation on the kitchen equipment and building) based on direct labor assigns $1.02 of fixed overhead per loaf None of the fixed costs are avoidable. The local bakery would charge Roasted Olive 51.74 per loat 1. What is the absorption cost of making the bread in-house? What is the variable cost per loaf? 1. What is the absorption cont of making the broad in house? What is the variable cont per tout? Roasted Ollve Outsourcing Decision (Absorption Costing) Choose from any list or enter any number in the input felds and then continue to the next question the loaves. Allocating fixed overhead (depreciation on the kitchen equipment and building) based on direct labor assigns $1.02 of fixed overhead por loat. None of the fixed costs are avoidable. The local bakery would charge Roasted Olive 51.74 per loaf 1. What is the absorption cost of making the bread in-house? What is the variable cost per loaf? 2. Should Roasted Olive 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 cost of making the bread in-house? What is the variable cost perioa? Roasted Ollve Outsourcing Decision (Absorption Costing Choose from any list or enter any number in the input fields and then continue to the next question Direct labor Direct material Fixed overhead per loaf Variable cost of outsourcing Variable overhead ition on the kitchen equipment and building) based on direct labor assigns uld charge Roasted Olive $1.74 per loaf ead in-house? What is the variable cost per loaf? ise or buy from the local bakery? Why? e should Roasted Olive consider when making this decision? osting) Choose from any list or enter any number in the input fields and then continue to the next question the loaves. Allocating fixed overhead (depreciation on the kitchen equipment and building) based on direct labor assigns $102 of fixed overhead pet loaf. None of the fixed costs are avoidable. The local bakery would charge Roasted Olive $1 74 per loaf 1. What is the absorption cost of making the bread in-house? What is the variable cost per loaf? 2. Should Roasted Olive 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? Decision loal Since the the cost of outsourcing each 3. In additi or when making this decision? Roasted Ollive should bake the bread in-house Roasted live should buy the bread from the local bakery Choose fr ince to the next question the loaves Allocating fred overhead (depreciation on the kitchen equipment and fixed costs are avoidable. The local bakery would charge Roasted Olive 5178 1. What is the absorption cost of making the bread in house? What is the variabl 2. Should Roasted Olive bake the bread in-house or buy from the local bakery 3. In addition to the financial analysis, what else should Roasted Olive consider per loaf None of the full absorbtion cost of making each loal is greater than full absorbtion cost of making each loaf is less than variable cost of making each oal is greater than Variable cost of making each loat is less than Decision Tool since the the cost of outing och 3. In addition to the financial analysis what else should Roasted Ole consider when making this decision? Choose from any list or enter any number in the put helds and then continue to the next question the loaves. Allocating fixed overhead (depreciation on the kitchen equipment and building) based on direct labor assigns 51.02 of fixed fixed costs are avoidable. The local bakery would charge Roasted Olive $1.74 per loaf 1. What is the absorption cost of making the bread in-house? What is the variable cost per loaf? 2. Should Roasted Olive 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? 3. In addition to the financial analysis what else should Roasted Olive consider when making this decision? Roasted Olive should consider the following qualitative factors before making a final decision How does the nuality and freshnece nf the loral haker hread compare to Roasted live bread? Choose from any list or enter any number in the input fields and then continue to the next question the loaves. Allocating fixed overhead (depreciation on the kitchen equipment and building) based on direct labor assigns 51.02 of fixed overhead per fixed costs are avoidable. The local bakery would charge Roasted Olive 51 74 per loaf 1. What is the absorption cost of making the bread in-house? What is the variable cost per loaf? 2. Should Roasted Olive 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? O A. How does the quality and freshness of the local bakery bread compare to Roasted Olive bread? OB. Will the local bakery meet their delivery time requirements? OC. If labor and oven time were not devoted to breadmaking could another more profitable product be made in its place? OD. All of the above Choose from any list or enter any number in the input Vields and then continue to the next