Make-or-Buy Decision Companion Technologies Company has been purchasing carrying cases for its portable tablets at a delivered cost of $55 per unit. The company, which is currently operating below ull capacity charges actory overhead to production at he rate o 36% of direct labor cost. The fully absorbed un costs roduce comparable car in cases are expected to be as follows: Direct materials Direct labor Factory overhead (36% of direct labor) Total cost per unit $29.00 16.00 5.76 $50.76 If Companion Technologies Company manufactures the carrying cases, fixed factory overhead costs will not increase and variable factory overhead costs associated with the cases are expected to be 16% of the direct labor costs a. Prepare a differential analysis report for the make-or-buy decision. Enter your final answer as a positive amount if it represents a net cost savings; enter a negative amount if it represents an increase in cost. COMPANION TECHNOLOGIES COMPANY Manufacture Carrying Case Differential Analysis Report Purchase price of carrying case Differential cost to manufacture carrying case 29 Direct materials Direct labor Variable factory overhead 16 V 5.76 X 41.76 X Cost savings from manufacturing carrying case Feedback Check My Work a. Follow Exhibit 8 in the text. For the make alternative, add the variable and fixed costs. For the buy alternative, add the purchase price and the fixed costs. Determine the differential effect on revenues, costs, and income (loss). b. On the basis of the data presented, would it be advisable to make the carrying cases or to continue buying them? It would be advisable to manufacture the carrying cases because the cost savingswould be since it will continue whether the carrying cases are purchased or manufactured per unit. Fixed factory overhead is irrelevant