Suppose a Roasted Olive restaurant is considering whether to (1) bake bread for its that variable costs of making each loaf include restaurant in-house or (2) buy the bread from a local bakery. The chef estimates Allocating fxed overhead S0.50 of ingredients, $0 20 of variable overhead (electricity to run the oven), and S0 71 of direct labor for kneading and (depreciation on the kitchen equipment and building) based on direct labor assigns $1.06 of foxed overhead per loaf. None of the foxed costs are avoidable. The local bakery would c 1. What is the absorption cost of making the bread in-house? What is the vaniable cost per loaf? 2. Should Roasted Olive bake the bread in-house or buy from the local bakery? Why? 3. In addition to the financial analysis, what else should Roasted Olive consider when making this decision? harge Roasted Olive $1.76 per loaf 1. What is the absorption cost of making the bread in-house? What is the vaniable cost per loaf? Roasted Olive Outsourcing Decision (Absorption Costing) Variable cost per loaf Full (absorption) cost per loa