A company which currently makes part number 530 is considering purchasing the part externally for $38.50 each. The company needs 7000 of the part. Cost information from the production of part number 530 follows. Prepare a differential analysis to calculate the total difference in income if the company were to purchase the part instead of make it.

Direct Materials Direct Labor $21.00 14.00 7.00 Sohle Variable Overhead Fixed Overhead 3.50 Total Cost $45.50 Diffferential Analysis Make or Buy