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Make-or-Buy 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 $26 each. Zion uses 11,500 units of Component K2 each year. The cost per unit of this component is as follows: $12.00 Direct materials Direct labor Variable overhead 8.25 4.50 Fixed overhead 6.00 Total $30.75