would charge Olive Tree $$1\mathrm{.}78$ per loaf.

What is the absorption cost of making the bread in$-$house? What is the variable cost per loaf?

Should Olive Tree bake the bread in$-$house or buy from the local bakery? Why?

In addition to the financial analysis, what else should Olive Tree consider when making this decision?

What is the absorption cost of making the bread in$-$house? What is the variable cost per loaf?

Olive Tree

Outsourcing Decision $($Absorption Costing$)$

Full $($absorption$)$ cost per loaf