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 $11 each. Zion uses 4,800 units of Component K2 each year. The cost per unit of this component is as follows: Direct materials Direct labor Variable overhead Fixed overhead Total Required: Make $7.13 The fixed overhead is an allocated expense; none of it would be eliminated if production of Component K2 stopped. Buy 2.13 Differential Cost to Make 1.27 1. What are the alternatives facing Zion Manufacturing with respect to production of Component K2?

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 \$11 each. Zon uses 4,800 units of Compo.ent k2 each yeer. The cost per unit of this component is as follows: The fixed overtiead is an alocated expense; none of it would be eliminated if production of Component K2 stopped. Required: 1. What are the aitematives facing Zion Manufacturing with respect to production of Compenent K2? 2. Un the relevant costs for cach alternative. If required, round your answers to the neareit cent. If Zion decides to purchase the component from Bryce, by how much wit operating income increase or decrease? 3. Conceptual Connection: Which alternative is better? 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 \$11 each. Zon uses 4,800 units of Compo.ent k2 each yeer. The cost per unit of this component is as follows: The fixed overtiead is an alocated expense; none of it would be eliminated if production of Component K2 stopped. Required: 1. What are the aitematives facing Zion Manufacturing with respect to production of Compenent K2? 2. Un the relevant costs for cach alternative. If required, round your answers to the neareit cent. If Zion decides to purchase the component from Bryce, by how much wit operating income increase or decrease? 3. Conceptual Connection: Which alternative is better? 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 \$11 each. Zon uses 4,800 units of Compo.ent k2 each yeer. The cost per unit of this component is as follows: The fixed overtiead is an alocated expense; none of it would be eliminated if production of Component K2 stopped. Required: 1. What are the aitematives facing Zion Manufacturing with respect to production of Compenent K2? 2. Un the relevant costs for cach alternative. If required, round your answers to the neareit cent. If Zion decides to purchase the component from Bryce, by how much wit operating income increase or decrease? 3. Conceptual Connection: Which alternative is better? 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 \$11 each. Zon uses 4,800 units of Compo.ent k2 each yeer. The cost per unit of this component is as follows: The fixed overtiead is an alocated expense; none of it would be eliminated if production of Component K2 stopped. Required: 1. What are the aitematives facing Zion Manufacturing with respect to production of Compenent K2? 2. Un the relevant costs for cach alternative. If required, round your answers to the neareit cent. If Zion decides to purchase the component from Bryce, by how much wit operating income increase or decrease? 3. Conceptual Connection: Which alternative is better