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Troy Engines, Limited, manufacturos a variefy of engines tor use in heavy equipment. The company has aways, produced all of the necessary parts for its
Troy Engines, Limited, manufacturos a variefy of engines tor use in heavy equipment. The company has aways, produced all of the necessary parts for its engines, incluoing all of the carburetors. An outside suppiler has olfered to sell one fype of carburetor to frov to is own cost of producing the carburetor internaly Required: 1. Assuming the company has no alternative use for the facilies that are now being used to produce the carby etors, what would be the financial advantage (disadvantape) of buying 18,000 carburctors from the outside supples? 2. Should the outside suppliers offer be accepted? 3. Suppose that if the carburetors were purchased, Troy Engines, Limited, could wse the freed capacity to taunch a new product The segment margin of the new product would be $180,000 per year. Given this new assumption, what would be the linancial advantage (disadvantage) of biying t8.000 carburetors from the cutside supplier? 4 Given the new assumption in requirement 3 , should the outside subplier s otter be accepted? Comptete this question by entering your answers in the tabs below. Asuming the company has no aternative use for the facisies that are now being used to prodicat the carburotoes, what Would be the finandal advantage (cisadvantage) of buying 18,000 carburetors from the outside nupplier
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