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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 necessary 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 necessary parts for its engines, including all of the carburetors. An outside suppller has offered to sell one type of carburetor to Troy Engines, Limited, for a cost of $35 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 16,000 carburetors from the outside suppller? 2 Should the outside supplier's ofler be accepted? 3 Suppose that if the carburetors were purchased, froy Engines. Limited, could use the freed capacity to launch a new product. The segment margin of the new product would be $160.000 per yeat Given this new assumption, what would be the financial advantage (disadvantage) of buying 16,000 carburetors from the outside supplier? 4. Given the new assimption in requirement 3, should the outside supplier's offer be accepted

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