Exercise 11-3 Make or Buy Decision [LO11-3] Units 9 4 6. 207.000 92.000 138,000 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 $37 per unit To evaluate this offer, Troy Engines, Ltd. has gathered the following information relating to its own cost of producing the carburetor internally, 23,000 Per unit per Year Direct materiais $16 $ 368.000 Direct labor Variable manufacturing overhead Fixed manufacturing ovechead, traceable Fixed manufacturing overhead, allocated 207.000 Total cost 344 $1,012.000 *One-third supervisory salaries; two-thirds depreciation of special equipment (no resale valve). 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) or buying 23,000 carburetors from the outside supplier? 3. 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 $230,000 per year Given this new assumption, what would be the financial advantage 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. Required Required 2 Required 3 Required 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 23,000 carburetors from the outside supplier