Suppose Steakhouse restaurant is considering whether to (1) bake bread for its restaurant in-house or (2) buy the bread from a local bakery. The chef estimates that variable costs of making each loaf include $0.44 of ingredients, $0.24 of variable overhead (electricity to run the oven), and $0.70 of direct labor for kneading and forming the loaves. Allocating fixed overhead (depreciation on the kitchen equipment and building) based on direct labor, Steakhouse assigns $1.06 of fixed overhead per loaf. None of the fixed costs are avoidable. The local bakery would charge $1.82 per loaf. Requirements 1. What is the unit cost of making the bread in-house? Complete the following outsourcing decision analysis to determine Steakhouse's unit cost of making the bread. Direct material Steakhouse Outsourcing Decision Requirements Direct labor Variable overhead Variable cost per unit Plus: Fixed overhead per unit Cost per unit 1. What is the full product unit cost of making the bread in-house? 2. Should Steakhouse bake the bread in-house or buy from the local bakery? Why? 3. In addition to the financial analysis, what else should Steakhouse consider when making this decision? Get more help Print Done - X Iswer