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Troy Engines, Limited, manufactures a variety of engines for use in heavy equipment-The company has alwoys produced all of the necessary parts for its engines,
Troy Engines, Limited, manufactures a variety of engines for use in heavy equipment-The company has alwoys produced all of the necessary parts for its engines, including all of the carburetors. An cutside supplier has offered to seli cne type of carburetor to Troy Engines, Limited, for a cost of $30 per unit. To evaluate this offer, Troy Engines, Limited, has gathered the following information relating to its own cost of producing the carburetor internally: e). 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 advarsage (disadvantage) of buying 19,000 conburetors from the outside suppler? 2. Shouid the outside supplier's offer be accepted? 3. Suppose that if the corburetors were purchased, Troy Engines, Limited, could use the freed capacity to launch a new product. The segment margin of the new product would be $30,000 per year. Given this new assumption, what would be the financial advantage (disodvantege) of boying 13.000 carburetors from the outside suppliet? 4. Given the new asfumption in requirement 3, should the outside supplier's offer be accepted? Complete this question by entering your answers in the tabs below. Suppose that if the carburetors were purchased, Troy Engnes, Limited, could use the freed capacity to launch a new product. The segment margin of the new product nould be $130,000 per year. Given this new assumotion, what would be the financial advantoge (disadvantage) of buying 13,000 caburetors from the outside supplien
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