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 $13 each. Zion uses 4,900 units of Component K2 each year. The cost per unit of this component is as follows: Direct materials $7.62 Direct labor 2.85 Variable overhead 1.76 Fixed overhead 3.00 Total $15.23 The fixed overhead is an allocated expense; none of it would be eliminated if production of Component K2 stopped