Exercise $23-1($Algo$)$ Make or buy LO P$1$

Beto Company pays $$7\mathrm{.}50$ per unit to buy a part for one of the products it manufactures. With excess capacity, the company is considering making the part. Making the part would cost $$8\mathrm{.}70$ 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. $($Enter your answers rounded to $2$ decimal places.$)$

$($b$)$ Should Beto make or buy the part?

$\backslash$table$[[($a$)$ Make or Buy Analysis,$],[$Direct materials,$],[$Direct labor,$],[$Overhead$,],[$Cost to buy,$],[$Cost per unit,$],[$Cost difference,$],[,],[($b$)$ Company should:,$]]$

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