Exercise $10-1($Algo$)$ Make or buy LO P$1$

Beto Company pays $$3\mathrm{.}90$ per unit to buy a part for one of the products it manufactures. With excess capacity, the company is

considering making the part. Making the part would cost $$3\mathrm{.}30$ per unit for direct materials and $$1\mathrm{.}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?