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3 Troy Engines, Ltd, manufactures a variety of engines for use in heavy equipment. The company has always produced all necessary parts for its engines,

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3 Troy Engines, Ltd, manufactures a variety of engines for use in heavy equipment. The company has always produced all necessary parts for its engines, including all of the carburetors. An outside supplier has offered to sell one type of carburetor to of the Troy Engines, Ltd, for a cost of s35 per unit To evaluate this offer, Troy Engines, utd, has gathered the following information relating to its own cost of producing the carburetor internally 16,000 Units Per Per Unit Direct materials Direc labor Variable manufacturing overhead Pixed manufacturing overhead, traceable Fixed manufacturing overhead, allocated Total cost 16 $256,000 12 192,000 3 48,000 3 48,000 - 96,000 Print $640,000 One-third supervisory salaries; two-thirds depreciation of special equipment (no resale value). Required 1. Assuming the company has no alternative use for the facilities that are now being used to produce the carburetors, what would be the financial advantage (disadvantage) of buying 16,000 carburetors from the outside supplier? 2. Should the outside supplier's offer be accepted? 3. Suppose that if the carburetors were p Troy Engines, Ltd, could use the freed capacity to launch a new product. The is new assumption, what would be financial advantage per year. Given th (disadvantage) of buying 16,000 carburetors from the outside supplier

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