Use the following information for Exercises 8-38 and 8-39:
Zion Manufacturing had always made its components in-hours. However, Bryce Component Works had recently offered to supply one component, K2, at a price of $25 each. Zion uses 10,000 units of Component K2 each year. The cost per unit of this components is as follows:
8-39 Make-or-Buy Decision
Refer to the information for Zion Manufacturing above. Assume that 75% of Zion Manufacturing’s fixed overhead for Component K2 would be eliminated if that component were no longer produced.
Required:
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