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 (1) bake bread for its restaurant in house, or (2) buy bread from a local bakery. The chef estimates the following costs of making each loaf of bread:
Ingredients (DM)$0.52Direct Labor$0.79VMOH$0.27FMOH$0.96Cost per loaf$2.54
The local bakery would charge $1.78 per loaf of bread.
1. Determine whether Roasted Pepper should continue to bake the bread in-house or purchase it from the local bakery.
2. In addition to the financial analysis, what else should Roasted Pepper consider when making this decision?

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