beto company pays $4.70 per unit to buy a part for one products it manufactures. with excess capacity, the company is considering making the part. making the part would cost $4.50 per unit for direct materials and $1.00 per unit for direct labor. the company normally applies overhead at the predetermined rate of 200% of direct labor cost. incremental overhead to make the part would be 80% of direct labor cost.

a. prepare a make or buy analysis of costs for this part.

b. should beto make or buy the part?

Beto Company pays $4,70 per unit to buy a part for one of the products it manufactures. With excess capocity, the company is considering making the part. Making the part would cost $4.50 per unit for direct materials and $1.00 per unit for direct labor. The company normally applies overhead at the predetermined rate of 200% of direct labor cost. Incremental overhead to make the part would be 80% of direct labor cost. (a) Prepare a make or buy analysis of costs for this part. Note: Enter your answers rounded to 2 decimal places. (b) Should Beto make or buy the part