Exercise 12-3 Make or Buy a Component [LO12-3] nes, Ltd. manufactures a variety of engines for use in heavy equipment. The company has always produced all of the necessary parts for its engines, indluding all of the carburetors. An outside supplier has offered to sell one type of carburetor to Troy Engines, Ltd. for a cost of $44 per unit To evaluate this offer, Troy Engines, Ltd., has gathered the following information relating to its own cost of producing the carburetor internally Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead, traceable Fixed manufacturing overhead, allocated 14.300 Per Units Unit Per Year S 13 $185,900 15 214,500 3 42,900 6 85,800 17 243,100 Total cost $ 54 $772,200 "40% supervisory salaries:80% 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 produoe the carburetors, compute the total cost of making and buying the parts, (Round your Fixed manufacturing overhead per unit rate to 2 decimals.) Make Buy Total relevant cost (14,300 units) 1b. Should the outsioe suppliers offer be s coepted? O Acoept O Reject