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I was trying to find the percentage that I need to be able to start and got stuck. I need help on financial advantage and
I was trying to find the percentage that I need to be able to start and got stuck. I need help on financial advantage and financial disadvantage.
Troy Engines, Ltd., manufactures a variety of engines for use In heavy equlpment. 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 $34 per unit. To evaluate this offer, Troy Engines, Ltd., has gathered the following Information relating to its own cost of producing the carburetor Internally: 21,000 Units Per Unit Per Year Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead, traceable Fixed manufacturing overhead, allocated Total cost $ 14 $ 294,000 252,000 42,000 189,000 12 12 252,000 $ 49 $ 1,029,000 One-third supervisory salaries, two-thirds depreclation of special equlpment (no resale value) Required 1. Assuming the company has no alternative use for the facilities that are now belng used to produce the carburetors, what would be the financial advantage (disadvantage) of buylng 21,000 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 $210,000 per year. Given this new assumption, what would be the financlal advantage (disadvantage) of buying 21,000 carburetors from the outside suppller? 4. Given the new assumption In requirement 3, should the outside supplier's offer be accepted? 3Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1Reqired 2 Required 3 Required 4 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 21,000 carburetors from the outside supplier? Financial (disadvantage) 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 21,000 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 $210,000 per year. Given this new assumption, what would be the financial advantage (disadvantage) of buying 21,000 carburetors from the outside supplier? 4. Given the new assumption In requirement 3, should the outside supplier's offer be accepted? 3 Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3Required 4 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 $210,000 per year. Given this new assumption, what would be the financial advantage (disadvantage) of buying 21,000 carburetors from the outside supplier? Financial advantage Required 2 Required 4Step by Step Solution
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