Troy Engines ud manufactures a varkety of engines for use in heavy equipment. The compary has always produced all of the necessary parts for its engines, including all of the carburetors. An outside supplier has offered to produce and sell one type of carburetor to Troy Engines Ld for a cost of $54 per unit. To evaluate this offer, Troy Engines Ited has gathered the following infornation relating to its own cost of producing the carburetor internally 1 Direct materiats cost $33 per unlt 2. Troy Engines pays its direct tabour employees $20 per hour, each carburetor rechares 30 minutes of labour time 3. Varlable monuffeturing overhead is allocated at 30% of direct labour cost 4. Total fixed manufacturing cost amounts to $15 per unit, of which 60% is allocated common cosf and the remaining 40% covers depreciation of special equipment and supervisory sadaries. The special equipment has no resale value Supervisory personnel wilf be transferred to a different department if the company decides to purchase the carburetor from the outside supplier. 5 Vearly prodaction of this type of carburetor is 16,900 units. Required: 1. A. Assume that the company has no alternatue use for the facilities that are now being used to produce the carburefons. Compute the total differential cost per unit for producing and buying the product. 1-b. Should the outside supplier's offer be accepted? Yes No 2-a. Suppose that if the carburctors were purchased, Troy Engines Itd. could use the freed capacity to launch a new product. The segment margin of the new product would be $150,000 per year. Compute the total differential cost for producing and buying the product. 2-b. Should Troy Engines Ltd, accept the offer to buy the carburetors for $54 per unit