Troy Engines Ltd manufactures a variety of engines for use in heavy equipment. The company has always produced all of the necessary parts of 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 $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: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?Should the outside supplier's offer be accepted?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 $150,000 per year. Given this new assumption, what would be the financial advantage (disadvantage) of buying 14,000 carburetors from the outside supplier?Given the new assumption in requirement 3, should the outside supplier's offer be accepted?

louietor to Troy Engines, Lid., for a cost o $35 per unit. To evaluate this offer, Troy Engines, Ltd., has gathered the following information elating to its own cost of producing the carburetor internally: Per 15,000 Units Unit per Year Direct materials .... $14 $210,000 Direct labor .... 10 150,000 Variable manufacturing overhead 3 45,000 Fixed manufacturing overhead, traceable 6 90,000 Fixed manufacturing overhead, allocated .. . 9 135,000 Total cost .. ... $42 $630,000 *One-third supervisory salaries; two-thirds depreciation of special equipment (no resale value)