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can you please help me with this problem ? Troy Engines, Ltd., manufactures a varlety of engines for use in heavy equipment. The company has
can you please help me with this problem ?
Troy Engines, Ltd., manufactures a varlety 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, L.td., for a cost of $40 per unit. To evaluate this offer. Troy Engines, Lid., has gathered the following information relating to its own cost of producing the carburetor internally: "One-thitd supervisory salaries, two thirdis depreciation of spechal equipment (no resale value), Required: 1. Assuming the company has no offernative use fot the facillies that are now being used to produce the carburotors, what would be the financial advantage (disadvantage) or buyirg 18,000 carturetors from the outside supplied 2 Should the outside suppllets offer be aceepted? 3. Suppose that it the carburetors wete purchased, Troy Engines, Udi. could use the freed cop ocity fo taimch a new produict. The segment matgin of the new product would be $180.000 per year Given this new as5umption what would be the financiar acdvartage (disadyantage) of buying 18,000 carburetors from the outside supnfler? 4. Given the new assumption in requirement 3, should the outstoe supplier s offer be accepteu? Complete this question by entering your answers in the tabs below. 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 18,000 carburetors from the outside supplier? Complete this question by entering your answers in the tabs below. Suppose that if the carburetors were purchased, Troy Engines, Ltd., could use the freed capacity to launch a new product, The segment margin of the new product would be $180,000 per year. Given this new assumption, what would be the financiai advantage (disadvantage) of buying 18,000 carburetors from the outside supplier Step by Step Solution
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