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Troy Engines, Lid., manufactures a variety of engines for use in heavy equipment. The company has always produced all of the necessary parts for its

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Troy Engines, Lid., 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, Lid, for a cost of $34 per unit. To evaluate this offer, Troy Engines, Ltd. has gathered the following information relating to its own cost of producing the carburetor internally 14.000 Per Units Unit Per Year Direct materials $ 9 $125.000 Direct labor 11 154,000 Variable manufacturing overhead 2 28.000 Fixed manufacturing overhead, traceable g* 125.000 Fixed manufacturing overhead, allocated 13182.000 Total cost $ 44 $616,000 *40% supervisory salaries, 60% depreciation of special equipment (no resale value) Required: 1a. Assuming that the company has no alternative use for the facilities that are now being used to produce the carburetors, compute the total cost of making and buying the parts. (Round your Fixed manufacturing overhead per unit rate to 2 decimals.) Make Buy Total relevant cost (14,000 units) 1b. Should the outside supplier's offer be accepted? Accept Roject 2a Suppose that if the carburetors were purchased, Troy Engines, id could use the the capacity to launch a new product. The segment margin of the new product would be $136.600 per year. Compute the total cost of making and buying the parts. Round your Fixed manufacturing overhead per unit rate to 2 decimals) Total relevant cost (14,000 units) 4 perut 2Should Try Engines, Ld, coept the offer to buy the carburetors for Accept

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