I II. Problem #2 - Make or Buy (8 points) Riggs Company purchases sails and produces small sailboats (that require a single sail). It currently produces 1,200 sailboats per year, operating at normal capacity, which is about 80% of full capacity. Riggs purchases sails at $250 each, but the company is considering using the excess capacity to manufacture the sails instead. The manufacturing cost per sail would be $100 for direct material, $80 for direct labor, and $90 for overhead. The overhead includes $78,000 of annual fixed overhead that is currently allocated to the sailboat production. The president of Riggs has come to you for advice. "It would cost me $270 to make the sails," she says, "but only $250 to buy them. Should I continue buying them, or have I missed something?" Required: a. What is the incremental cost per unit for Riggs to make the sails? As such, should Riggs make or buy the sails? b. If Riggs suddenly finds an opportunity to rent out the unused capacity of its factory for $77,000 per year, what would be the total relevant cost to outsource production of the sails