1. Snipe Company has been purchasing a component, Part Q, for $19.20 per 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 is estimated as follows:

   Direct materials		$11.50
   Direct labor		4.50
   Variable factory overhead		1.12
   Fixed factory overhead		3.15
   Total		$20.27

   Question Content Area

   Prepare a differential analysis report dated March 12 of the current year. Round your answers to two decimal places. If an amount is zero, enter "0".

   Differential Analysis Make (Alternative 1) or Buy (Alternative 2) Part Q March 12

   blank	Make Part Q (Alternative 1)	Buy Part Q (Alternative 2)	Differential Effects (Alternative 2)
   Unit costs:	blank	blank	blank
   Direct laborDirect materialsPurchase priceSupplies expensesVariable operating expenses	$- Select -	$- Select -	$- Select -
   Direct materialsPurchase price of partRevenue from salesUtilities expenseVariable operating expenses	- Select -	- Select -	- Select -
   Depreciation expenseDirect laborPurchase price of partRevenue from salesVariable operating expenses	- Select -	- Select -	- Select -
   Interest expensePurchase price of partRevenue from salesVariable factory overheadVariable operating expenses	- Select -	- Select -	- Select -
   Depreciation expenseFixed factory overheadPurchase price of partRevenue from salesVariable operating expenses	- Select -	- Select -	- Select -
   Total unit costs	$fill in the blank 9c7559fcd023f80_21	$fill in the blank 9c7559fcd023f80_22	$fill in the blank 9c7559fcd023f80_23

   Question Content Area

   Should the company make or buy the component? The company should

   buymake

   the component.