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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 neccessary part for the
troy engines limited manufactures a variety of engines for use in heavy equipment. the company has always produced all of the neccessary part for the 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 $ per unit. To evaluate this offer, Troy Engines limited has gathered the following informstion relating to itd own cost of
producing the carburetor internally.
assume the company has no alternative use for the facilities that are now being used to produce the carburetor what what would be the financial advantage or disadvantage of buying carburetors from an outside supplier.
Shoshould the outside suppliers offer be excepted?
Suppsuppose 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 $ per year given this new assumption what would be the financial advantage or disadvantage of buying carburetors from an outside supplier?
Gigiven the new assumption in requirement three, should the outside suppliers offer be accepted?
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