Gent Designs requires three units of part A for every unit of A1 that it produces. Currently, part A is made by Gent, with these per-unit costs in a month when 4,000 units were produced:

Direct materials	$4.00
Direct labor	1.40
Manufacturing overhead	1.30
Total	$6.70

Variable manufacturing overhead is applied at $1.00 per unit. The other $0.30 of overhead consists of allocated fixed costs. Gent will need 5,800 units of part A for the next years production.

Cory Corporation has offered to supply 5,800 units of part A at a price of $6.90 per unit. If Gent accepts the offer, all of the variable costs and $1,200 of the fixed costs will be avoided.

A. Calculate the differential cost?

Cost to buy	$
Cost to make
Differential cost	$

B. Should Gent Designs accept the offer from Cory Corporation?