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parts for its engines, including the carburetors. An outside supplier offered to sell one type of carburetor to Troy Engines, Limited, for a cost of
parts for its engines, including the carburetors. An outside supplier offered to sell one type of carburetor to Troy Engines, Limited, for a cost of $ per unit. To evaluate this offer, Troy Engines, Limited, summarized the cost of prducing the carburetor internally as follows:
tabletablePerUnittable Units PerYearDirect materials,$$
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If the company has no alternative use for the facilities being used to produce the carburetors, what would be the financial advatage disadvantage of buying carburetors from the outside supplier?
Should the outside supplier's offer be accepted?
Suppose if the carburetors were purchased, troy engines, limited coupd use the freed capacity to launch a new product with a segment margin of per year. Given this new assumption what would be the financial advatage disadvatage of buying carburetors from the outside supplier?
Given the new assumption in the rd question should the outside suppliers offer be accepted?
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