Coram Audio makes wireless headphones. Each pair of headphones comes with a travel case. Since its founding, Coram

has manufactured its own travel cases. Recently, Holmur Travel Gear $($HTG$),$ a local outfitter that manufactures and sells

backpacks, tent cases, and so on$,$ contacted Coram and proposed that they produce the headphone travel cases. Based on

management experience, Coram's cost per travel case is as follows $($based on annual production of $43,200$ units$).$

HTG has offered to sell the case to Coram for $$39$ each. The total order would amount to $43,200$ travel cases per year.

Coram's management decides that they will make the switch to HTG cases if Coram can save at least $$13,600$ per year.

Accepting the offer would eliminate annual fixed overhead of $$82,080.$

Required:

a$.$ Prepare a schedule that shows the total differential costs.

b$.$ Should Coram continue to make the travel cases or buy them from HTG$?$Coram Audio makes wireless headphones. Each pair of headphones comes with a travel case. Since its founding, Coram has manufactured its own travel cases. Recently, Holmur Travel Gear $($HTG$),$ a local outfitter that manufactures and sells backpacks, tent cases, and so on$,$ contacted Coram and proposed that they produce the headphone travel cases. Based on management experience, Coram's cost per travel case is as follows $($based on annual production of $43,200$ units$).$