Par 12 Direct labor 12 180.000 60.000 90.000 . Troy Engines, Limited, 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, Limited, for a cost of $36 per unit. To evaluate this offer, Troy Engines, Limited, has gathered the following information relating to its own cost of producing the carburetor Internally 15,000 to Unit Your Direct materiale 180,000 Variable manufacturing overhead Tixed manufacturing overhead, traceable Fixed manufacturing overhead, allocated 135.000 Total cost 14 $365,000 *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 offor be accepted? 3. Suppose that if the carburetors were purchased, Troy Engines, Limited, could use the freed capacity to lounch 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) or 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 1 Required 2 Required 3 Required 4 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 $150,000 per year. Given this new assumption, what would be the financial advantage (disadvantage) of buying 15,000 carburetors from the outside supplier? Financial advantage Direct labor 12 4 6. 50.000 Troy Engines, Limited, 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, Limited for a cost of $36 per unit . To evaluate this offer, Troy Engines, Limited, has gathered the following information relating to its own cost of producing the carburetor Internally: Per 15,000 Unite Unit For Your Direct materials 612 $ 180,000 180,000 Variable manutacturing overhead Vixed manufacturing overhand, traceable 90,000 Fixed manufacturing overband, allocated . Total cost 3.43 $.605,000 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) or 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, Limited, 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? 135,000 ce Complete this question by entering your answers in the tabs below. Requids : Required 2 Required 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 15,000 carburetors from the outside supplier? Finano (disadvantage)
