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please show all calculations clearly Font Paragraph Styles E Q#2-10 points Troy Engines, Ltd., manufactures a variety of engines for use in heavy equipment. The
please show all calculations clearly
Font Paragraph Styles E Q#2-10 points 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 sup- plier has offered to sell one type of carburetor to Troy Engines, Ltd., for a cost of $35 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 Unit 15,000 Units per Year $14 10 Direct materials Direct labor. Variable manufacturing overhead. Fixed manufacturing overhead, traceable.. Fixed manufacturing overhead, allocated $210,000 150,000 45,000 90,000 135,000 6 $42 $630,000 Total cost "One-third supervisory salaries; two-thirds depreciation of special equipment (no resale value). Required: 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 $150.000 per year. Should Troy Engines, Ltd., accept the offer to buy the carburetors for $35 per unit? Show all computationsStep by Step Solution
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