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Please explain and show all work. Please be sure final answer is correct. Thank you! Troy Engines, Limited, manufactures a variety of engines for use

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Please explain and show all work. Please be sure final answer is correct. Thank you!
image text in transcribed

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 $35 per unit To evaluate this offer, Troy Engines, Limited, has gathered the following information relating to its own cost of producing the carburetor internally: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead, traceable Fixed manufacturing overhead, allocated Total cost Unit $ 13 13 2 9* 12 $ 49 16, Unite per Year $ 208,e 208, e 32, e 144, 192,000 $ 784, *One-third supervisory salaries; two-thirds depreciation of special equipment (no resale value). Required: I. 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 16,000 carburetors from the outside supplier? 2. Should 9.he outside supplier's offer be accepted? 3. Suppos& 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 $160,000 per year. Given this new assumption, what would be the financial advantage (disadvantage) of buying 16,000 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 4 Required 3 Required 2 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 16,000 carburetors from the outside supplier?

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