Post Technologies Company has been purchasing carrying cases for its portable tablets at a delivered cost of $13.00 per unit. The company, which is currently operating below full capacity, charges factory overhead to production at the rate of 60% of direct labor cost. The total unit costs to produce comparable carrying cases are expected to be as follows:

Direct materials ................................................$ 4.00
Direct labor ..........................................................6.50
Factory overhead (60% of direct labor) ...........3.90
Total cost per unit ..........................................$14.40

If Post 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 20% of the direct labor costs.

a. Prepare a differential analysis report for the make-or-buy decision.

b. On the basis of the data presented, would it be advisable to make the carrying cases or to continue buying them? Explain.