3 Troy Engines, Ltd., manufactures a variety of engines for use in heavy equipment. The company has always produced all of the necessary parts for its engines, including all of the carburetors. An outside supplier has offered to sell one type of carburetor to Troy 214 Engines, Ltd., for a cost of $35 per unit. To evaluate this offer, Troy Engines, Ltd., has points gathered the following information relating to its own cost of producing the carburetor internally Skipped 20,000 Units eBook Per per Unit Year Direct materials $17 $340,000 Hint Direct labor 11 220,000 Variable manufacturing 3 Print overhead 60,000 Fixed manufacturing overhead, traceable 3* 60,000 Referenc Fixed manufacturing overhead, allocated 6 120,000 Total cost $40 $800,000 "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 20,000 carburetors from the outside supplier? 2. Should the outside supplier's offer be accepted? 3. Suppose that if the carburetors were purchased, Troy Engines Ltd, could use the freed HYU. 3 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 214 buying 20,000 carburetors from the outside supplier? 2 Should the outside supplier's offer be accepted? points 3. Suppose that if the carburetors were purchased, Troy Engines, Ltd., could use the freed Skipped capacity to launch a new product. The segment margin of the new product would be $200,000 per year. Given this new assumption, what would be the financial advantage (disadvantage) of buying 20,000 carburetors from the outside supplier? eBook 4. Given the new assumption in requirement 3, should the outside supplier's offer be accepted? Hint Complete this question by entering your answers in the tabs below. Print Requi... Requi... Requi... Requi... 2 1 Reference 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 20,000 carburetors from the outside supplier? Show less Required 1 Required 2 >