=+Factory overhead (40% of direct labor) 12.80 ______ Total cost per unit $69.80 ______ ______ If Companion Computer Company manufactures the carrying cases, fixed factory overhead costs will not increase and variable factory overhead costs associated with the cases are expected to be 15% of the direct labor costs.

a. Prepare a differential analysis report,dated October 11,2010,for the make-or-buy decision.