Troy Engines, Ltd., manufactures a variety of engines for use in heavy equipment. The company has always produced all of the necessary parts for its engines, including all of the carburetors. An outside supplier has offered to sell one type of carburetor to Troy Engines, lid, for a cost of $35 per unit. To evaluate this offer, Troy Engines, Ltd, has gathered the following information relating to its own cost of producing the carburetor internally, 15,000 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead, traceable Tixed manufacturing overhead, allocated Total cost Units Per Per Unit Year $14 $ 210,000 10 150,000 3 45,000 6. 90,000 9 135,000 342 $630,000 One-third supervisory salaries; two-thirds depreciation of special equipment (no resale value). Required: 1. Assuming the company has no alternative use for the facilities that are now being used to produce the carburetors, what would be the financial advantage (disadvantage) of buying 15,000 carburetors from the outside supplier? 2. Should the outside supplier's offer be accepted? 3. Suppose that if the carburetors were purchased, Troy Engines, Ltd, could use the freed capacity to lounch a new product. The segment margin of the new product would be $150,000 per year. Given this new assumption, what would be the financial advantage 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 Refuired 1 Required 2 Required 3 Required 4 Assuming the company has no alternative use for the facilities that are now being used to produce the carburetors, what would be the financial advantage (disadvantage) of buying 15,000 carburetors from the outside supplier? Required 2 > Troy Engines, Ld, manufactures a variety of engines for use in heavy equipment. The company has always produced all of the necessary parts forts encies, including all of the carburetors. An outside supplier has offered to sell one type of carburetor to Troy Englad for a cost of $35 perunt. To evaluate this offer. Troy Engines, Lid, has gathered the following information relating to its own cost of producing the carburetor Internal 13,000 Dita Yes Direct materiais Yer 516520.00 DIA Variable manufacturing the 10 150.000 2 wechend, we 45.00 Tarieved at Total 301 30.000 "One third supervisory Salaries: Two-thirds depreciation of special equipment no resale value Required: 1 Assuming the company has no alternative use for the cities that are now being used to produce the carburetors, what would be the financial advantage onadvantage of buying 15.000 carburetors from the outside ? 3. Suppose that if the carburetors were purchased, Troy Engines, Lud, could use the freed capacity to launch a new product. The segment margin of the new product would be $950.000 per year Given this new assumption, what would be the financial advantage sadvantage of buying 15.000 carburetors from the outside wolier? 4. Given the new motion in requirement should the outside suppler's offer be accepted? Complete this question by entering your answers in the tabs below Re> Suppose that if the carburetors were purchased, Troy the could use the freed capacity to and new groduct. The segmest margin of the new product would be $150,000 per year. Given to what would be the (davao buying 15.000 artists from outside Required Required)
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