Suppose an Olive Terrace restaurant is considering whether to (1) bake bread for its restaurant in-house or (2) buy the bread from a local bakery. The chef estimates that variable co variable overhead (electricity to run the oven), and $0.70 of direct labor for kneading and forming the loaves. Allocating fixed overhead (depreciation on the loaf. None of the fixed costs are avoidable. The local bakery would charge Olive Terrace $1.75 per loaf 1. What is the absorption cost of making the bread in-house? What is the variable cost per loaf? 2. Should Olive Terrace bake the bread in-house or buy from the local bakery? Why? 3. In addition to the financial analysis, what else should Olive Terrace consider when making this decision? kitchen equipment and bu 1. What is the absorption cost of making the bread in-house? What is the variable cost per loaf? Olive Terrace Outsourcing Decision (Absorption Costing) Direct labor Direct material Fixed overhead per loaf Variable cost of outsourcing Variable overhead 2. Should Olive Terrace bake the bread in-house or buy from the local bakery? Why? Decision vsince the the cost of outsourcing each loatf 3. In addition to the financial analysis, what else should Olive Terrace consider when making this decision? Olive Terrace should consider the following qualitative factors before making a final decision Choose from any list or enter any number in the input fields and then continue to the next