Mobile Computer Company has been purchasing carrying cases for its portable computers at a delivered cost of \($30\) per unit. The company, which IS currently operating below full capacity, charges factory overhead to production at the rate of 40% of direct materials cost. The costs to produce comparable carrying cases are expected to be \($14\) per unit for direct materials and per unit or direct labor. If Mobile Computer Company manufactures e 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 materials costs.

a. Prepare a differential analysis report, dated June 5 of the current year, for the make or buy decision.

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