Make-or-Buy Decision Zion Manufacturing had always made its components in-house. However, Bryce Component Workstad recently offered to supply one component, K2, at a price of $12 each, Zion uses 4,900 units of Component K2 cach year. The cost per unit of this component is as follows: Direct materials $7.64 Direct labor 2.22 Variable overhead Fixed overhead 3.00 Total The fixed overhead is an allocated expense; none of it would be eliminated il production of Component K2 stopped, 1.32 $14.18 Required: 1. What are the alternatives facing Zion Manufacturing with respect to production of Component ? 2. List the relevant costs for each alternative. It required, round your answers to the nearest cent Total Relevant Cost Make per unit Buy per unit Differential Cost to Make per unit 11 Zion decides to purchase the component from Bryce, by how much will operating income increase or decrease? 3. Conceptual Connection: Which alternative is better