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 $12 each. Zion uses 4,600 units of Component K2 each year. The cost per unit of this component is as follows: Direct materials $7.86 Direct labor 2.67 Variable overhead 1.40 Fixed overhead 4.00 Total $15.93 The fixed overhead is an allocated expense; none of it would be eliminated if production of Component K2 stopped. Required: 1. What are the alternatives facing Zion Manufacturing with respect to production of Component K2? Make the component in-house or to buy it from Bryce 2. List the relevant costs for each alternative. If required, round your answers to the nearest cent.

	Total Relevant Cost
Make	$fill in the blank 2 per unit
Buy	$fill in the blank 3 per unit
Differential Cost to Make	$fill in the blank 4 per unit

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

$fill in the blank 6