Suppose a Roasted OWe restourant is considering whether to (1) bake bread for its restaurant in-house or (2) bry the broad from a local bakery. The chef ertmatos that variable costs of making each ioat incluce 50.52 of ingredients,50.20 of variable overhead (electricity to nun the over), and 50.74 of diect labor for kneading and forming the loaves. Alocating fired overtioad (depreciation on the kicher equipment and building) based on direct labor assigns $1.04 of foed ovehead per loat. Nore of the foed costs are avcidatie. The local babery would charge Roasted Olve $1.80 perloat 1. What is the absarption post of making the bread in-house? What is the variable cost per loar? 2. Should Reasied Olive bake the bread in house of buy from the local bakery? Why? 3. In adstion to the financial analysis, what else should Roasted Olve consider when making tris decision? 1. What is the absorpton cost of making the bread in-house? What is the varable cost per loar? 2. Shinild Raasted Clive bake the broat in thoute or by from the Iotal bakery? Why? Decision [ since the 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: A. If labor and oven time were not devoted to breadmaking, could another more profitable product be made in its place? B. Will the local bakery meet their delivery time requirements? C. How does the quality and freshness of the local bakery bread compare to Roasted Olive bread? D. All of the above E. None of the above