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 4,700 units of Component K2 each year. The cost per unit of this component is as follows: Direct materials $7.78 2.89 Direct labor Variable overhead 1.24 Fixed overhead 4.00 Total $15.91 The fixed overhead is an allocated expense; none of it would be eliminated if production of Component K2 stopped. 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 4,700 units of Component K2 each year. The cost per unit of this component is as follows: Direct materials $7.78 2.89 Direct labor Variable overhead 1.24 Fixed overhead 4.00 Total $15.91 The fixed overhead is an allocated expense; none of it would be eliminated if production of Component K2 stopped