Question: Suppose Roasted Pepper Restaurant is considering whether to ( 1 ) bake bread for its restaurant in house, or ( 2 ) buy bread from
Suppose Roasted Pepper Restaurant is considering whether to bake bread for its restaurant in house, or buy bread from a local bakery. The chef estimates the following costs of making each loaf of bread:
Ingredients DM$Direct Labor$VMOH$FMOH$Cost per loaf$
The local bakery would charge $ per loaf of bread.
Determine whether Roasted Pepper should continue to bake the bread inhouse or purchase it from the local bakery.
In addition to the financial analysis, what else should Roasted Pepper consider when making this decision?
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