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Troy Engines, Umited, 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 ane type af carburater to Tray Engines, Limited, for a cost of $34 per urit. To evaluate this offer, Troy Engines, Limited, has gathered the following information relating to its awn cost of producing the carburetor internaly. Required: 1. Assuming the company has no alternathe use for the facilities that are now being used to produce the carburetors, what would be the financial advantage (disadvantage) of buying 19,000 carburatars from the outside supplier? 2. Should the cutside supplier's affer 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 $190,000 per year. Glven this new assumption, what would be the financial advantage (disadvantage) of buying 19.000 carburetors from the autside suppler? 4. Given the new assumption in requirement 3, should the outside supplier's affer be accepted? Complete this question by entering your answers in the tabs below. Assuming the company has no alternative use for the fadilities that are now being used to produce the carburetors, what would be the finanolal advantage (disadvantage) of buying 19,000 carburetors from the outside supplier? Should the outside supplier's offer be accepted? 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 $190,000 per year. Given this new assumption, what would be the financial advantage (disadvantage) of buying 19,000 carburetors from the outside supplier? Given the new assumption in requirement 3 , should the outside supplier's offer be aoceptedStep by Step Solution
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