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Exercise 2 3 - 2 ( Algo ) Make or buy LO P 1 Gelb Company currently makes a key part for its main product.

Exercise 23-2(Algo) Make or buy LO P1
Gelb Company currently makes a key part for its main product. Making this part incurs per unit variable costs of $1.30 for direct materials and $0.85 for direct labor. Incremental overhead to make this part is $1.44 per unit. The company can buy the part for $3.76 per unit.
(a) Prepare a make or buy analysis of costs for this part. (Enter your answers rounded to 2 decimal places.)
(b) Should Gelb make or buy the part?
\table[[(a) Make or Buy Analysis,Make,],[Direct materials,,],[Direct labor,,],[Overhead,,],[Cost to buy,,],[Cost per unit,,],[,,],[Cost difference,,],[,,],[(b) Company should:,,]]
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