(5%) Snipe Company has been purchasing a component, Part Q, for $19.20 a unit. Snipe is currently operating at 70% of capacity and no significant increase in production is anticipated in the near future. The cost of manufacturing a unit of Part Q, determined by absorption costing methods, is estimated as follows:

Direct materials .......$11.50

Direct labor ......... 4.5

Variable factory overhead ... 1.12

Fixed factory overhead .... 3.15

Total $20.27

Prepare a differential analysis report, dated March 12 of the current year, on the decision to make or buy Part Q.