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Troy Engines, Limited, manufactures a varlety of engines for use in heavy equipment. The company has always produced all of the parts for its englnes,
Troy Engines, Limited, manufactures a varlety of engines for use in heavy equipment. The company has always produced all of the parts for its englnes, Including the carburetors. An outside supplier offered to sell one type of carburetor to Troy Engines, Limlted, for a cost of $36 per unit. To evaluate this offer, Troy Englnes, Limlted, summarized the cost of producing the carburetor Internally as follows: One-third supervisory salarles; two-thirds depreclation of special equipment (no resale value). Required: 1. If the company has no alternatlve use for the facilitles belng used to produce the carburetors, what would be the financlal advantage (disadvantage) of buylng 20,000 carburetors from the outside supplier? 2. Should the outside supplier's offer be accepted? 3. Suppose If the carburetors were purchased, Troy Englnes, Limited, could use the freed capacity to launch a new product with a segment margin of $200,000 per year. Glven this new assumption, what would be the financlal advantage (disadvantage) of buylng 20,000 carburetors from the outside supplier? 4. Given the new assumption In requlrement 3, should the outside supplier's offer be accepted? Complete this question by entering your answers in the tabs below. If the company has no alternative use for the facilities being used to produce the carburetors, what would be the financial advantage (disadvantage) of buying 20,000 carburetors from the outside supplier? Troy Englnes, Limited, manufactures a varlety of englnes for use In heavy equipment. The company has always produced all of the parts for Its englnes, Including the carburetors. An outside supplier offered to sell one type of carburetor to Troy Engines, Limlted, for a cost of $36 per unit. To evaluate this offer, Troy Englnes, Limited, summarlzed the cost of producing the carburetor Internally as follows: One-third supervisory salarles; two-thirds depreclation of speclal equipment (no resale value). Required: 1. If the company has no alternatlve use for the facllitles belng used to produce the carburetors, what would be the financlal advantage (disadvantage) of buylng 20,000 carburetors from the outside supplier? 2. Should the outside supplier's offer be accepted? 3. Suppose If the carburetors were purchased, Troy Englnes, Limited, could use the freed capacity to launch a new product with a segment margin of $200,000 per year. Glven this new assumption, what would be the financlal advantage (disadvantage) of buylng 20,000 carburetors from the outside supplier? 4. Given the new assumption In requirement 3 , should the outside supplier's offer be accepted? Complete this question by entering your answers in the tabs below. Should the outside supplier's offer be accepted? Troy Engines, Limited, manufactures a varlety of engines for use in heavy equipment. The company has always produced all of the parts for Its englines, Including the carburetors. An outside supplier offered to sell one type of carburetor to Troy Engines, Limlted, for a cost of $36 per unlt. To evaluate this offer, Troy Englnes, Limited, summarlzed the cost of producing the carburetor Internally as follows: *One-third supervisory salarles; two-thirds depreclation of speclal equipment (no resale value). Required: 1. If the company has no alternatlve use for the facllitles belng used to produce the carburetors, what would be the financlal advantage (disadvantage) of buylng 20,000 carburetors from the outside supplier? 2. Should the outside supplier's offer be accepted? 3. Suppose If the carburetors were purchased, Troy Englnes, Limlted, could use the freed capacity to launch a new product with a segment margin of $200,000 per year. Glven this new assumption, what would be the financlal advantage (disadvantage) of buylng 20,000 carburetors from the outside supplier? 4. Given the new assumption In requlrement 3 , should the outside supplier's offer be accepted? Complete this question by entering your answers in the tabs below. Suppose if the carburetors were purchased, Troy Engines, Limited, could use the freed capacity to launch a new product with a segment margin of $200,000 per year. Given this new assumption, what would be the financial advantage (disadvantage) of buying 20,000 carburetors from the outside supplier? Troy Engines, Limited, manufactures a varlety of engines for use in heavy equipment. The company has always produced all of the parts for Its englnes, Including the carburetors. An outside supplier offered to sell one type of carburetor to Troy Engines, Limited, for a cost of $36 per unit. To evaluate this offer, Troy Englnes, Limited, summarlzed the cost of producing the carburetor Internally as follows: *One-third supervisory salarles; two-thirds depreclation of special equipment (no resale value). Requlred: 1. If the company has no alternatlve use for the facllitles belng used to produce the carburetors, what would be the financlal advantage (disadvantage) of buylng 20,000 carburetors from the outside supplier? 2. Should the outside supplier's offer be accepted? 3. Suppose If the carburetors were purchased, Troy Englnes, Limited, could use the freed capacity to launch a new product with a segment margin of $200,000 per year. Glven this new assumption, what would be the financlal advantage (disadvantage) of buylng 20,000 carburetors from the outside supplier? 4. Glven the new assumption In requirement 3 , should the outside supplier's offer be accepted? Complete this question by entering your answers in the tabs below. Given the new assumption in requirement 3 , should the outside supplier's offer be accepted
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