Exercise 11-3 (Algo) Make or Buy Decision [LO11-3] Troy Engines, Limited, 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, Uimited, for a cost of $30 per unit. To evaluate this offer, Troy Engines, Limited, has gathered the following information relating to its own cost of producing the carburetor internally: 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 12,000 carburetors from the outside supplier? 2. Should the outside supplier's offer be accepted? 3. Suppose that if the carburetors were purchased, Troy Engine5, Limited, could use the freed capacity to launch a new product. The segment margin of the new product would be $120,000 per yeat, Given this new assumption, what would be the financial advantage (disadvantage) of buying 12,000 carburetors from the outside supplier? 4. Given the new assumption in requirement 3, should the outside supplier's offer be accepted? Complete this question by entering your answers in the tabs below. Assuming the company has no alternative use for the faclities that are now being used to produce the carburetors, what would be the financial advantage (dlsadvantage) of buying 12,000 carburetors from the outside supplier? Exercise 11-3 (Algo) Make or Buy Decision [LO11-3] Troy Engines, Limited, manufactures a varlety of engines for use in heavy equipment. The company has always produced all of the necessary parts for its engines, including oll of the carburetors. An outside supplier has offered to sell one type of carburetor to Troy Engines, Limited, for a cost of $30 per unit. To evaluate this offer, Troy Englnes, Limited, has gathered the following information relating to its own cost of producing the carburetor internally. Required: 1. Assuming the company has no alternative use for the facilites that are now being used to produce the carburetors, what would be the financial advantage (disadvantage) of buying 12,000 carburetors from the outside supplier? 2. Should the outside supplier's offer be accepted? 3. Suppose that if the carburetors were purchased, Troy Engines, Limited, could use the freed capocity to lounch a new product. The segment margin of the new product would be $120.000 per year. Given this new assumption, what would be the financial advantage (disadvantoge) of buying 12.000 carburetors from the outside supplier? 4. Glven the new assumption in requirement 3, should the outside supplier's offer be accepted? Complete this question by entering your answers in the tabs below. Should the outside supplier's offer be accepted? Troy Engines, Limited, manufactures a variety of engines for use in heavy equipment. The company has alwoys 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, Limited, for a cost of $30 per unit. To evaluote this offer, Troy Engines, Limited, has gathered the foliowing information relating to its own cost of producing the carburetor internally. Required: 1. Assuming the company has no alternative use for the focilities that are now being used to produce the carburetors, what would be the financial advantage (disadvantage) of busing 12,000 carburetors from the outside supplier? 2 Should the outside supplier's offer be accepted? 3. Suppose that if the carburetors were purchased, Troy Engines. Limited, could use the freed capacity to launch a new product. The segment margin of the new product would be $120,000 per year. Given this new assumption, what would be the finaricial advantage (disadvantage) of buying 12,000 carburetors from the outside supplier? 4. Given the new assumption in requirement 3, should the outside supplier's offer be accepted? Complete this question by entering your answers in the tabs below. Suppose that if the carburetors were purchased, Troy Engines, Umited, could use the freed capacity to launch a new product. The segment margin of the new product would be $120,000 per year, Given this new assumption, what would be the financiat. advantage (disadvantage) of buying 12,000 carburetors from the outside suppiser? Exercise 11-3 (Algo) Make or Buy Decision [LO11-3] Troy Engines, Limited, manufactures a vatiety 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, Limited, for a cost of $30 per unit. To evaluate this offer, Troy Engines, Limited, has gathered the following information relating to its own cost of producing the carburetor internally: Required: 1. Assuming the company has no alternative use for the facilites that are now being used to produce the carburetors, what would be the financial advantage (disodvantage) of buying 12,000 carburetors from the outside supplier? 2. Should the outside supplier's offer be accepted? 3. Suppose that if the carburetors were purchased, Troy Engines, Limited, could use the freed capacity to lounch a new product. The segment margin of the new product would be $120,000 per year. Given this new assumption, what would be the financial advantage (disadvantage) of buying 12,000 carburetors from the outside supplien? 4. Given the new assumption in requirement 3, should the outside supplier's offor be accepted? Complete this question by entering your answers in the tabs below. Givon the new assumption in requirement 3 , should the outside supplier's offer be accepted