Managerial: differential analysis report

T 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 the absorption costing method, is estimated as follows: Direct materials Direct labor Variable factory overhead Fixed factory overhead Total $11.50 4.50 1.12 335 $20.27 Prepare a differential analysis report, dated March 12 of the current year, on the decision to make or buy Part