Exercise 12-3 Make or Buy a Component [LO12-3] 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 $19 per unit. To evaluate this offer, Troy Engines, relating to its own cost of producing the carburetor internally: Ltd., has gathered the following information 15,700 Per Units Unit Per Year S5 S 78,500 7 109,900 ariable manufacturing overhead 31,400 6 94,200 Direct materials Direct labor Fixed manufacturing overhead, Fixed manufacturing overhead, 9 141,300 allocated 28s455,300 Total cost "40% supervisory salanes: 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.) Total relevant cost 15,700 units b.Should the outside supplier's offer be accepted? Accept Reject 2a.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 $50,820 making and buying the parts. (Round your Fixed manufacturing overhead per unit rate to 2 decimals.) per year. Compute the total cost of Total relevant cost (15,700 units