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Make-or-Bux Decision Zion Manufacturing had always made its components in-house. However, Bryce Component Works had recently offered to supply one component, K2, at a price of $13 each. Zion uses 4,500 units of Component K2 each year. The cost per unit of this component is as follows: Direct materials $7.91 Direct labor 2.65 Variable overhead 1.47 Fixed overhead 2.00 Total $14.03 The floved overhead is an allocated expense; none of it would be eliminated production of Component K2 stopped, Required: 1. What are the alternatives facing Zion Manufacturing with respect to production of Component 2? Make the component in-house or to buy it from Bryce round your answers to the nearest cent Make the component in-house or to sell it from Bryce Make the component in-house or to purchase it from Bryce per unit Differential Cost to Make per unit If Zion decides to purchase the component from Bryce, by how much will operating income increase or decrease? Buy 3. Conceptual Connection: Which alternative is better? Previous Neyt Variable overhead 1.47 Fixed overhead 2.00 Total $14.03 The fixed overhead is an allocated expense; none of it would be eliminated if production o Required: 1. What are the alternatives facing Zion Manufacturing with respect to production of Comp 2. List the relevant costs for each alternative. If required, round your answers to the neare Total Relevant Cost Make per unit Buy per unit Differential Cost to Make per unit If Zion decides to purchase the component from Bryce, by how much will operating income in 3. Increase fonnection: Which alternative is better? Decrease Buy per unit Differential Cost to Make $ per unit If Zion decides to purchase the component from Bryce, by how much will Buy Make 3. Col Connection: Which alternative is better

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