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 $36 per unit. To evaluate this offer, Troy Engines, Limited, has gathered the following information relating to its own cost of producing the carburetor internally: 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 20,000 carburetors from the outside supplier? 2. Should the outside supplier's offer be accepted? 3. Suppose 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 $200,000 per year. Given this new assumption, what would be the financial advantage (disadvantage) of buying 20,000 carburetors from the outside supplier? 4. Given the new assumption in requirement 3 , should the outside supplier's offer be accepted? 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 20,000 carburetors from the outside supplier? Suppose 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 $200,000 per year. Given this new assumption, what would be the financial advantage (disadvantage) of buying 20,000 carburetors from the outside supplier? Imperial Jewelers manufactures and sells a gold bracelet for $410.00. The company's accounting system says that the unit product cost for this bracelet is $264.00 as shown below: The members of a wedding party have approached Imperial Jewelers about buying 14 of these gold bracelets for the discounted pric of $370.00 each. The members of the wedding party would like special filigree applied to the bracelets that would increase the direc materials cost per bracelet by $6. Imperial Jewelers would also have to buy a special tool for $456 to apply the filigree to the bracelets. The special tool would have no other use once the special order is completed. To analyze this special order opportunity, Imperial Jewelers has determined that most of its manufacturing overhead is fixed and unaffected by variations in how much jewelry is produced in any given period. However, $7.00 of the overhead is variable with respe to the number of bracelets produced. The company also believes that accepting this order would have no effect on its ability to produce and sell jewelry to other customers. Furthermore, the company could fulfill the wedding party's order using its existing manufacturing capacity. Required: 1. What is the financial advantage (disadvantage) of accepting the special order from the wedding party? 2. Should the company accept the special order? What is the financial advantage (disadvantage) of accepting the special order from the wedding party? Input the numbers from Connect in the shaded spots. Use the larger shaded spots below to create an alaysis with and without the opportunity cost. Use a formula to say whether the outside offer should be accepted in both cases. 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 supplier has offered to sell one type of carburetor to Troy Engines, Ltd., for a cost of $XX per unit. To evaluate this offer, Troy Engines, Ltd., has gathered the following information relating to its own cost of producing the carburetor internally: "One-third supervisory salaries; two-thirds depreciation of special equipment (no resale value). 0.333333 Input supplier offer 1. Answer below in the shaded section. 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 XX, XXXX carburetors from the outside supplier? 2. Should the outside supplier's offer be accepted? Input segment margin 3. 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 $XXX,000 per year. Given this new assumption, what would be the financial advantage (disadvantage) of buying XX,000 carburetors from the outside supplier? 4. Given the new assumption in requirement 3, should the outside supplier's offer be accepted? No Yes or No? Answer parts 1 and 3 here using formulas: Make or Buy Cost to Make Cost to Buy Cost from Supplier DM DL VMOH FMOH traceable FMOH allocated $$ Advantage (Disadvantage) to Buy $ Make or Buy Cost to Make Cost to Buy Cost from Supplier DM DL VMOH FMOH traceable FMOH allocated Opportunity cost - segment margin foregone Advantage (Disadvantage) to Buy The members of the wedding party would like special filigree applied to the bracelets that would require Imperial Jewelers to buy a special tool for It would increase the direct materials cost per bracelet by Insert increase in DM from The special tool would have no other use once the special order is completed. Connect To analyze this special order opportunity, Imperial Jewelers has determined that most of its manufacturing overhead is fixed and unaffected by variations in how much jewelry is produced in any given period. However, some of the overhead is variable with respect to the number of bracelets produced. Insert amount of The company also believes that accepting this order would have no effect on its ability to produce and sell jewelry to other customers. Furthermore, the company could fulfill the wedding party's order using its existing manufacturing capacity. Required: 1. What is the financial advantage (disadvantage) of accepting the special order from the wedding party? 2. Should the company accept the special order? Yes or No Answer Part 1 in a schedule with formulas below: Special Order Incremental Revenue Incremental Costs DM DL VMOH Total incremental Costs Advantage (Disadvantage) of accepting $