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

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Troy Engines, Limited, manufactures a variety of engines for use in heavy equipment. The company has always produced all of the hecessary 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 $39 per unit. To evaluate this offer. Troy Engines, Limited, has gathered the following information relating to its own cost of producing the carburetor intemally: 3). 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 catbutetors 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 $210,000 pel year Gien this new assumption, what would be the financial advantage (disadvantage) of buying 21,000 carburetors from the outside suppier? 4. Given the new assumption in requirement 3 , should the outside suppliers offer be accepted

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