$4$

Gelb Company currently makes a key part for its main product. Making this part incurs per unit variable costs of $$1\mathrm{.}65$ for direct materials and $$1\mathrm{.}20$ for direct labor. Incremental overhead to make this part is $$1\mathrm{.}58$ per unit. The company can buy the part for $$4\mathrm{.}67$ per unit.

$($a$)$ Prepare a make or buy analysis of costs for this part. $($Enter your answers rounded to $2$ decimal places.$)$

$12\mathrm{.}5$

$($b$)$ Should Gelb make or buy the part?

points

$\backslash$table$[[($a$)$ Make or Buy Analysis,Make,Buy$],[$Direct materials,$0\mathrm{.}00,],[\backslash$table$[[$Direct maternals$],[$Direct labor$]]],[\backslash$table$[[$Direct labor$],[$Overhead$]]],[\backslash$table$[[$Overhead$],[$Cost to buy$]]],[$Cost per unit,,$],[$Cost difference$],[,,],[($b$)$ Company should:,,$]]$