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Troy Engines, Limited, manufactures a varlety of engines for use in heavy equipment. The company has always pioduced all of the parts for its engines,
Troy Engines, Limited, manufactures a varlety of engines for use in heavy equipment. The company has always pioduced all of the parts for its engines, Including the carburetors. An outside supplier offered to sell one type of carburetor to Troy Engines, Limited, for a cost of $34 per unit. To evaluate this offer. Troy Englnes. Limited. surnmarized the cost of producing the carburetor internally as foliows: 'One third supervisory salaries; two-thirds depreciation of spectal equipinent (no resale value) Required: 1. If the company has no alternative use for the facilites being used to produce the carburetors, what would be the financial advantage (disadvantage) of buying 21,000 carburetors from the outside supplier? 2. Should the outside supplier's offer be accepted? 3. Suppose if the carburetors were purchased, Troy Engines, Limited, could use the freed capacity to launch a new product with a segment margin of $210,000 per year. Given this new assumption, what would be the firanclal advantage (disadvantage) of buying 21,000 carburetors from the outside supplier? 4. Given the new assumption in fequirement 3 , should the outside supplier's offer be accepted? Conplete this question by entering your answers in the tabs below.: the corrusany has no akertistive use for the focilities beiry used to produce the carburethrs, what would be the financial tvantoge (disadvantage) of buring 21,000 carburetors from the cutside supplier? buring 21.000 carburcoors trom the oufside suppliver
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