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Riggs Company purchases sails and produces sailboats. It currently produces 1,300 sailboats per year, operating at normal capacity, which is about 80% of full capacity. Riggs purchases sails at $259 each, but the company is considering using the excess capacity to manufacture the sails instead. The manufacturing cost per sail would be $93 for direct materials, $85 for direct labor, and $90 for overhead. The $90 overhead is based on $78,000 of annual fixed overhead that is allocated using normal capacity. The president of Riggs has come to you for advice. "It would cost me $268 to make the sails," she says, "but only $259 to buy them. Should I continue buying them, or have I missed something?" Prepare a per unit analysis of the differential costs. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Net Income Make Sails Increase (Decrease) Buy Sails 24 Direct material Direct labor Variable overhead Purchase price Total unit cost Should Riggs make or buy the sails? v the sails, Riggs should e Textbook and Media If Riggs suddenly finds an opportunity to rent out the unused capacity of its factory for $85,000 per year, would your answer to part (a) change? by $ This is because the net income will

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