Question 1 a) Zee Manufacturing had always made its components in-house. However, Bryan Component Works had recently offered to supply one component, 86, at a price of RM25 each. Zee uses 10,000 units of component 86 each year. The cost per unit of this component is as follows: RM Direct materials 1200 Direct labor 8.25 Variable overhead 4.50 Fixed overhead 2.00 Total 26.75 Refer to the information for Zee Manufacturing above. The xed overhead is an allocated expense; none of it would be eliminated if production of component 86 stopped. Required: i. What are the alternatives facing Zee Manufacturing with respect to production of component 86? ii. List the relevant costs for each alternative, if Zee decides to purchase the component from Bryan, by how much will operating income increase or decrease? iii. Which alternative is better? b) Refer to the information for Zee Manufacturing above. Assume that 75% of Zee Manufacturing's xed overhead for component 86 would be eliminated if that component were no longer produced. Required: If Zee decides to purchase the component from Bryan, by how much will operating income increase or decrease? Which alternative is better