C12 Quiz Solved: The Regal Cycle Com Check Your Work 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 $23 per unit. To evaluate this offer, Troy Engines, Ltd., has gathered the following information relating to its own cost of producing the carburetor internally: 5,400 Per Units Unit Per Year Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead, traceable Fixed manufacturing overhead, allocated S 5 S 77,000 7 107,800 3 46.200 9 138,600 9 138,600 Total cost s 33 $508,.200 40% supervisory salaries, 60% depreciation of special equipment (no resale value). Required: 1a. Assuming that the company has no alternative use for the facilities that are now being used to produce the carburetors, compute the total cost of making and buying the parts. (Round your Fixed manufacturing overhead per unit rate to 2 decimals.) Answer is complete but not entirely correct. Buy 437,360 Make Total relevant cost (15,400 units) 369,600 1b. Should the outside supplier's offer be accepted? Accept OOReject 2a. Suppose that it the carburetors were purchased, Troy Engines, Ltd., could use the freed capacity to Co sup launch a new product. The segment margin of the new product would be $73,760 per year Compute the total cost of making and buying the parts (Round your Fixed manufacturing overhead per unit rate to 2 decimals.) Diffe cost Answer is complete but not entirely correct. 369,600 Os 363600 Reject Total relevant cost (15,400 units)