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, Ltd. for a cost of $34 per unit. To evaluate this offer. Troy Engines, Ltd. has gathered the following information relating to its own cost of producing the carburetor internally? "One-third supervisory salarles; two-thirds depreclation of speclal equipment (no resale value). Required: 1. Assuming the company has no alternative use for the facilitics that are now being used to produce the carburetors, what would be the firiancial advantage (disadvantage) of buying 21,000 carburetors from the outside supplier? 2. Should the outside supplier's offer be accepted? 3. Suppose that if the carburetors were puichased. Troy Engines, Ld. could use the freed capacity to launcha new product. The segment margin of the new product would be $210,000 per year, Glven this new assumption, what would be the financial advanthge (disadvantage) of buying 21,000 carburetors from the outside supplier? 4. Given the new assumption in requlement 3, should the outside suppller's offer be accepted? 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 financlal advantage (disadvantage) of buying 21,000 carburetors from the outside suppller? 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 launch a new product. The segment margin of the new product would be $210,000 per year. Given this new assumption. what would be the financial advantage. (disadvantage) of buying 21,000 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. Assuming the company has no alternative use for the facilies that are now being used to produce the carburetors, what would be the financial advantage (disadvantige) of buying 21,000 carburetors from the outside supplien? 'One-third supervisory salaries; two-thirds depreciation of special equipment (no resale value), Required: 1. Assuming the company has no altemative use for the facilities that are now 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 accepled? 3. Suppose that if the carburetors were purchased, Troy Engines. Ltd, could use the freed capacity to launch a new product. The segment margin of the new product would be $210,000 per year. Given this new assumption, what would be the financial advantage (disadvantage) of buying 21,000 carburetors from the outside supplier? 4. Given the new assumplion 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? '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 21,000 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 launch a new product. The segment margin of the new product would be $210,000 per year. Given this new assumption, what would be the financial advantage (disadvantage) of buying 21,000 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. Suppose that if the carburetors were purchased, Troy Engines, Ltd., could use the freed capacity to launch a new product. The segment margin of the new product would be $210,000 per year. Given this new assumption, what would be the financial advantage (disadvantage) of buying 21,000 carburetors from the outside supplier? 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
