Westland Company makes decorative 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:

$($Click the icon to view the costs.$)$

Fixed costs are primarily the depreciation on kitchen equipment such as ovens and mixers. Westlandexpects to retain the equipment. Westlandcan buy the cakes for $$24.$

$11.$ Should Westlandmake the cakes or buy them? Why?

$12.$ If Westlanddecides to buy the cakes, what are some qualitative factors that Westlandshould also consider?

$11.$ Should Westland 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.$)$

$\backslash$table$[[$Cake costs,Difference,$],[$Make cakes,Outsource cakes,$($make$-$outsource$)]]$

Variable costs:

Direct materials $$

Direct labor $$

Variable manufacturing overhead $$

Purchase cost $$

$$

$$

Total differential cost of cakes $$

$$

$$

Westland $$ continue to make the cakes. Outsourcing wil

$12.$ If Westland decides to buy the cakes, what are some qualitative factors that Westland should also consid

A$.$ Qualitative factors include contribution margins of the various products produced.

B$.$ Qualitative factors include quality and on$-$time delivery.

C$.$ Qualitative factors include considering sunk costs and manager's opinions.

D$.$ Qualitative factors include separating fixed and variable costs.