Make$-$or$-$Buy Decision

Pizana Computer Company has been purchasing carrying cases for its portable computers at a purchase price of $$18$ per unit. The company, which is currently operating below full capacity, charges factory overhead to production at the rate of $40\%$ of direct labor cost. The unit costs to produce comparable carrying cases are expected to be as follows:

$\backslash$table$[[$Direct materials,$$5\mathrm{.}00$

Direct labor $8\mathrm{.}00$

Factory Overhead $(40\%$ of direct labor$)3\mathrm{.}20$

Total cost per unit $$16\mathrm{.}20$

Is Pizzana computer company manufactures occurring cases fix factory overhead cost will not increase increase in variable factory overhead cost associated with the cases are expected to be $25\%$ of direct labor costs.

a$.$ Repair a differential analysis dated May $31$ to determine whether the company should make alternative one or by alternative to the caring case.