Suppose Roasted Pepper 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 $0.58 of ingredients, $0.19 of variable overhead (electricity to run the oven), and 50.77 of direct labor for kneading and forming the loves Allocating red overhead (depreciation on the kitchen equipment and building) based on direct labor, Roasted Pepper assigns $0.99 of fixed overhead per loaf None of the fixed costs are available. The local takery would charge $1.68 per loaf Read the requirements Requirements 1. What is the unit cost of making the bread in-house? Complete the following outsourcing decision analysis to determine Roasted Pepper's unit cost of making the brand, Roasted Pepper Outsourcing Decision 1. What is the full product unit cost of making the bread in-house? 2. Should Roasted Pepper bake the bread in-house or buy from the local bakery? Why? 3. In addition to the financial analysis, what else should Roasted Pepper consider when making this decision? Suppose Roasted Pepper restaurant is considering whether to (1) bake bread making each loaf include $0.58 of ingredients, $0.19 of variable overhead (elec overhead (depreciation on the kitchen equipment and building) based on direct local bakery would charge $1.68 per loaf. Read the requirements. Direct material Direct labor Variable overhead HITT Variable cost per unit Plus: Fixed overhead per unit Suppose Roasted Pepper restaurant is considering whether to (1) bake broad for its restaurant in-house or (2) buy the broad from a local bakery. The the estimates that variat making each loaf include $0.58 of ingredients, $0.19 of variable overhead (electricity to run the oven), and $0.77 of direct labor for kneading and forming the loves. Allocating overhead (depreciation on the kitchen equipment and building) based on direct labor, Roasted Pepper assigns $0.99 of fixed overhead per loal None of the feed costs are avo local bakery would charge $1.68 per loaf. Read the requirements Plus: Fixed overhead per unit Cost per unit Requirement 2. Should Roasted Pepper binke the bread in-house or buy from the local bakery? Why? Decision: since the of making each loaf is the cost of outsourcing each lout Suppose Roasted Pepper restaurant is considering whether to (1) bake bread for its restaurant in-house or (2) buy the bread from a local bakery. The making each loat include $0.58 of ingredients, $0.19 of variable overhead (electricity to run the oven), and $0.77 of direct labor for kneading and form overhead (depreciation on the kitchen equipment and building) based on direct labor, Roasted Pepper assigns $0.99 of fixed overhead per loat. None local bakery would charge $1.68 per loaf. Read the requirements Requirement 3. In addition to the financial analysis, what else should Roasted Pepper consider when making this decision? Roasted Pepper should consider the following qualitative factors before making a final decision: O A. Will the local bakery meet their delivery time requirements? B. How does the quality and freshness of the local bakery bread compare to Roasted Pepper bread? OC. Both A and B Suppose Roasted Pepper restaurant is considering whether to (1) bake bread for its restaurant in-house or (2) buy making each loaf include $0.58 of ingredients, $0.19 of variable overhead (electricity to run the oven), and $0.77 of overhead (depreciation on the kitchen equipment and building) based on direct labor, Roasted Pepper assigns $0.9 local bakery would charge $1.68 per loaf. Read the requirements. B. How does the quality and freshness of the local bakery bread compare to Roasted Pepper bread? C. Both A and B D. None of the above