Brief Exercise 11-3 Make or Buy a Component [LO3] 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 Engines, Ltd, for a cost of $47 per unit. To evaluate this offer Troy Engines, Ltd, has gathered the following Information relating to its own cost of producing the carburetor internally: 15,500 Units Per Unit per year $201,500 232,500 46,500 139,500 263,500 $883,500 $13 15 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead, traceable Fixed manufacturing overhead, allocated Total cost 9* 17 $57 One-third supervisory salaries; two-thirds depreciation of special equipment (no resale value rev: 02-18-2011 References Brief Exercise 11-3 Make or Buy a Component [LO3)] Section Break Brief Exercise 11-3 Make or Buy a Component [LO3] 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 Engines, Ltd, for a cost of $47 per unit. To evaluate this offer Troy Engines, Ltd, has gathered the following Information relating to its own cost of producing the carburetor internally: 15,500 Units Per Unit per year $201,500 232,500 46,500 139,500 263,500 $883,500 $13 15 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead, traceable Fixed manufacturing overhead, allocated Total cost 9* 17 $57 One-third supervisory salaries; two-thirds depreciation of special equipment (no resale value rev: 02-18-2011 References Brief Exercise 11-3 Make or Buy a Component [LO3)] Section Break