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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

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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 $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 15,400 Per Units Unit Per Year Direct materials 9 138,600 11 169,400 Direct labor 3 46,200 Variable manufacturing overhead 9" 138,600 Fixed manufacturing overhead, traceable 13 200,200 Fixed manufacturing overhead, allocated 45 $693,000 Total cost "40% supervisory salaries; 60% depreciation of special equipment (no resale value. Required: la. Assuming that the company has no alternative use for the facilities that are now being used to produce the carburetors, compute the total cost of making and buying the parts. (Round your Fixed manufacturing overhead per unit rate to 2 decimals.) Make Buy Total relevant cost (15,400 units)

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