Exercise 13-3 (Algo) Make or Buy Decision (LO13-3) 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, Lid for a cost of $36 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 Pixed manufacturing overhead, traceable Tixed manufacturing overhead, allocated Total coat 15,000 Unita Per Per Unit Year $ 12 $ 180,000 12 180.000 4 60,000 6- 90,000 9 135,000 5 43 5 645,000 *One-third supervisory salaries, two-thirds depreciation of special equipment (no resale value) 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 15.000 carburetors from the outside supplier? 2 Should the outside supplier's offer be accepted? 3. Suppose that if the carburetors were purchased. Troy Engines, Ltd. could use the freed capacity to launch a new product. The segment margin of the new product would be $150,000 per year Given this new assumption, what would be the financial advantage (disadvantage) of buying 15,000 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. Required: Required 2 Required 3 Required 4 ili ine outside su ule outside supplier's offer be accepted? 3. Suppose that if the carburetors were purchased, Troy Engines, Ltd., could use the free segment margin of the new product would be $150,000 per year. Given this new assum (disadvantage) of buying 15,000 carburetors from the outside supplier? 4. Given the new assumption in requirement 3, should the outside supplier's offer be acc Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Assuming the company has no alternative use for the facilities that are now being used to pro would be the financial advantage (disadvantage) of buying 15,000 carburetors from the outsi Required Required 2 > Financial (disadvantage) Financial advantage Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Suppose that if the carburetors were purchased, Troy Engines, Ltd., could use the freed capacity to laun segment margin of the new product would be $150,000 per year. Given this new assumption, what wo advantage (disadvantage) of buying 15,000 carburetors from the outside supplier?