Exercise $23-2($Algo$)$ Make or buy LO P$1$

Gelb Company currently makes a key part for its main product. Making this part incurs per unit varlable costs of $$2\mathrm{.}15$ for direct

materlals and $$1\mathrm{.}70$ for direct labor. Incremental overhead to make this part is $$1\mathrm{.}78$ per unit. The company can buy the part for $$5\mathrm{.}97$

per unit.

$($a$)$ Prepare a make or buy analysis of costs for this part. $($Enter your answers rounded to $2$ decimal places.$)$

$($b$)$ Should Gelb make or buy the part?