the company manufactures a variety of engines for use. the company has always produced all the neccessary parts for its engines, including its carburetors. an outside supplier has offered to sell one tyoe of carburetors for a cost of $34 per unit.

3. suppose that if the carburetors were purchased. the company could use the freed capacity to launch a new product. the segment margin of this nee product would be $210,000 per year. given this new assumption what would the financial advantage( disadvantage) of buying 21,000 carburetors from an outsider supplier be?

Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead, traceable Pixed manufacturing overhead, allocated Total cont 21,000 Units Unit Per Year $.14 $ 294,000 12 252,000 2 42.000 9 189,000 12 252,000 $ 49 $1,029,000 *One-third supervisory salaries; two-thirds depreciation of special equipment (no resale value). Priest 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 21,000 carburetors from the outside supplier? 2. Should the outside supplier's offor be accepted? erences