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 $12 each. Zion uses 4,500 units of Component K2 each year. The cost per unit of this component is as follows: Direct materials $7.74 Direct labor 2.40 Variable overhead 1.38 Fixed overhead 3.00 Total $14.52 The fixed overhead is an allocated expense; none of it would be eliminated if production of Component K2 stopped. Required: Make the component in-house or to buy it from Bryce 1. What are the alternatives facing Zion Manufacturing with respect to production of Component K2? Make the component in-house or to sell it from Bryce Make the component in-house or to purchase it from Bryce 2. List the relevant costs for each alternative. If required, round your answers to the nearest cent. Total Relevant Cost Make per unit 0 Buy per unit 0 Differential Cost to Make per unit 0 If Zion decides to purchase the component from Bryce, by how much will operating income increase or decrease? Increase Decrease HUILLITalive is better? Buy Make