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 absorption costing methods, 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
calculate the income (loss) per unit for the company to (1) buy the product and the (2) differential effect on income, and (3) determine the decision the company should make.