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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 engines,
Troy Engines, Limited, manufactures a varlety of engines for use In heavy equipment. The company has always produced all of the parts for its engines, Including the carburetors. An outside supplier offered to sell one type of carburetor to Troy Englnes, Limited, for a cost of $ per unit. To evaluate this offer, Troy Engines, Limited, summarlzed the cost of producing the carburetor Internally as follows: Onethird supervisory salarles; twothirds depreclation of special equipment no resale value Requlred: 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 carburetors from the outside supplier? Should the outside supplier's offer be accepted? Suppose If the carburetors were purchased, Troy Englnes, Limited, could use the freed capacity to launch a new product with a segment margin of $ per year. Glven this new assumption, what would be the financlal advantage disadvantage of buylng carburetors from the outside supplier? Given the new assumption In requirement 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 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 engines, Including the carburetors. An outside supplier offered to sell one type of carburetor to Troy Englnes, Limited, for a
cost of $ per unit. To evaluate this offer, Troy Engines, Limited, summarlzed the cost of producing the carburetor Internally as
follows:
Onethird supervisory salarles; twothirds depreclation of special equipment no resale value
Requlred:
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 carburetors from the outside supplier?
Should the outside supplier's offer be accepted?
Suppose If the carburetors were purchased, Troy Englnes, Limited, could use the freed capacity to launch a new product with a
segment margin of $ per year. Glven this new assumption, what would be the financlal advantage disadvantage of buylng
carburetors from the outside supplier?
Given the new assumption In requirement 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 carburetors from the outside supplier?
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