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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 produce and sell one type of carburetor to Troy Engines Ltd. for a cost of $115.0 per unit. To evaluate this offer, Troy Engines Ltd. has gathered the following information relating to its own cost of producing the carburetor internally Per 45,000 Units. Unit per Year Direct materials 24 $1,080,000 30 1,350,000 Direct labour 23 1,035,000 Variable manufacturing overhead Fixed manufacturing overhead, traceable 36.0 1,620,000 Fixed manufacturing overhead, allocated 29 1,305,000 $142.0 $6,390,000 Total cost One-third supervisory salaries; two-thirds depreciation of special equipment (no resale value) Required: 1-a. Compute the total differential cost per unit for producing and buying the product. (Round your answers to 1 decimal places Buy Total differential cost (per unit) 1-b. Should the outside supplier's offer be accepted? Yes No

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