Unit 5 12 10 Year $ 228,000 Troy Engines, Limited, 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, Limited for a cost of $30 per unit. To evaluate this offer, Troy Engines, Limited, has gathered the following information relating to its own cost of producing the carburetor internally Per 19,000 units per Direct materials Direct labor 190,000 Variable manufacturing overhead 3 57,000 Fixed manufacturing overhead, traceable 57,000 Fixed manufacturing overhead, allocated Total cost $ 646,000 *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 19.000 carburetors from the outside supplier? 2. Should the outside supplier's offer be accepted? 3. Suppose that if the carburetors were purchased, Troy Engines Limited, could use the freed capacity to launch a new product. The segment margin of the new product would be $190.000 per year. Given this new assumption, what would be the financial advantage (disadvantage) of buying 19.000 carburetors from the outside supplier? 4. Given the new assumption in requirement 3, should the outside supplier's offer be accepted? 3 6 $ 34 114,000 Complete this question by entering your answers in the tabs below. Required: Required 2 Required a 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 10,000 carburetors from the outside supplier? Required Required 2 > $ 12 1e 3 3 190,000 57,000 Troy Engines Limited, 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, Limited, for a cost of $30 per unit. To evaluate this offer, Troy Engines, Limited, has gathered the following information relating to its own cost of producing the carburetor internally Per 19,000 Units Per Unit Year Direct materials $ 228,000 Direct labor Variable manufacturing overhead Fixed manufacturing overhead, traceable 57,000 Fixed manufacturing overhead, allocated Total cost $. 34 $ 646, oce *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 19,000 carburetors from the outside supplier? 2. Should the outside supplier's offer be accepted? 3. Suppose that if the carburetors were purchased, Troy Engines, Limited, could use the freed capacity to launch a new product. The segment margin of the new product would be $190,000 per year . Given this new assumption, what would be the financial advantage (disadvantage) of buying 19.000 carburetors from the outside supplier? 4 Given the new assumption in requirement 3, should the outside supplier's offer be accepted? 114.000 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 1 Suppose that if the carburetors were purchased, Troy Engines, Limited, could use the freed capacity to launch a new product. The segment margin of the new product would be $190,000 per year. Given this new assumption, what would be the financial advantage (disadvantage) of buying 19,000 carburetors from the outside supplier