Telstar Company makes wedding cakes. The company is considering buying the cakes rather than baking them, which will allow it to concentrate on decorating. The company averages 100 wedding cakes per year and incurs the following costs from baking wedding cakes EEB (Click the icon to view the costs.) Fixed costs are primarily the depreciation on kitchen equipment such as ovens and mixers. Telstar expects to retain the equipment. Telstar can buy the cakes for $25 11. Should Telstar make the cakes or buy them? Why? 12. If Telstar decides to buy the cakes, what are some qualitative factors that Telstar should also consider? 11. Should Telstar make the cakes or buy them? Why? (For the Difference column, use a minus sign or parentheses only when the cost of outsourcing exceeds the cost of making the cakes in-house.) Make Outsource Difference Cake costs cakes cakes (make-outsource) Variable costs Costs Direct materials Direct labor Variable manufacturing overhead Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total manufacturing overhead Number of cakes 500 1,000 200 1,200 $ 2,900 100 29 Purchase cost Total differential cost of cakes Telstar ?| continue to make the cakes. Outsourcing will 12. If Telstar decides to buy the cakes, what are some qualitative factors that Telstar should also consider? O A. Qualitative factors include quality and on-time delivery. O B. Qualitative factors include separating fixed and variable costs C. Qualitative factors include contribution margins of the various products produced 0 D. Qualitative factors include considering sunk costs and manager's opinions