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Kando Company currently pays $ 1 3 per unit to buy a part for a product it manufactures. Instead, Kando could make the part for

Kando Company currently pays $13 per unit to buy a part for a product it manufactures. Instead, Kando could make the part for per unit costs of $6 for direct materials, $4 for direct labor, and $2 for incremental overhead. Kando normally applies overhead costs using a predetermined rate of 200% of direct labor cost.
(a) Prepare a make or buy analysis of costs for this part.
(b) Should Kando make or buy the part?

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