Make-or-Huy Decision Zion Manufacturing had always made its components in-house. However, Bryce Component Works had recently offered to supply one component per unit of this component is as follows: a price of s chon unuts al Component e Direct materials $12.00 Direct Labor Variable overhead Fixed overhead $30.75 Asume that 75% of Zion Manufacturing's fixed overhead for Component 2 would be eliminated if that component were no longer produced Requ Accounting numeric field 1. CONCEPTUAL CONNECTION: Increase Zion decides to purchase the component from ryce, by how much will operating income increase or decrease? which alternative is better? Purchase the component from Bryce 2. CONCEPTUAL CONNECTION try explain how increasing or decreasing the figure a cts Zion's final decision to make or purchase the component As the percentage of avoidable feed cost increases (above ), total relevant costs of making the component increase, causing the purchase decision to be more financially appealing compared to the keption) than it was when the percentage was 75%. In other words, as the percentage increases, difference between the purchase and make options increases resulting in the purchase decision being even more attractive Mortively, as the percentage of avoidable fixed costs decreases the "make" option eventually is equally costly and more appealing financially as the purchase" option. Finally, as the percentage of avoidable feed cont decreases low enough and the total relevant costs of making the component decrease the option becomes the more francally appealing option 3. CONCEPTUAL CONNECTION: By how much would the per un relevant fixed cost have to decrease before Zion would be indifferent (le, incur the same cost) between making versus purchasing the component