Company A currently buys 30,000 units of a part used to manufacture its product at $78 per unit. The supplier recently informed Company A that a 20 percent increase will take effect next year. Company A has some additional space and could produce the units for the following per-unit costs (based on 30,000 units):

Direct materials	$32
Direct labor	$24
Variable manufacturing overhead	$24

If Company A purchases the units from the supplier, it can rent out the plant for $45,000 per year.

Should Company A buy the part externally or make it internally? Use differential analysis to support your answer.

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