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 $4,100$ units of Component K$2$ each year. The cost per unit of this component is as follows:

The fixed overhead is an allocated expense; none of it would be eliminated if production of Component K$2$ stopped.

Required:

What are the alternatives facing Zion Manufacturing with respect to production of Component K$2?$

Make the component in$-$house or to buy it from Bryce grad$$

List the relevant costs for each alternative. If required, round your answers to the nearest cent.

If Zion decides to purchase the component from Bryce, by how much will operating income increase or decrease?