A company is analyzing a$$ make$-$versus$-$purchase situation for a component used in several$$ products, and the engineering department has developed these$$ data:

Option$$ A:

Purchase$10,000$ items per year at a fixed price of $$$$9\mathrm{.}05$ per item. The cost of placing the order is negligible according to the present cost accounting procedure.

Option$$ B:

Manufacture$10,000$ items per$$ year, using available capacity in the factory. Cost estimates are direct materialsequals$$$$5\mathrm{.}17$ per item and direct laborequals$$$$1\mathrm{.}38$ per item. Manufacturing overhead is allocated at$200\%$ of direct labor $($equals$$$$2\mathrm{.}76$ per$$ item$).$

Based on these$$ data, should the item be purchased or$$ manufactured?