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Use the following information to answer questions 19 - 20: Troy Engines, manufactures a variety of engines for use in heavy equipment. The company has

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Use the following information to answer questions 19 - 20: Troy Engines, 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, for a cost of 540 per unit. To evaluate the offer. Troy Engines, has gathered the relating to its own cost of producing the carburetor internally: Per Unit $18 $12. Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead, traceable Fixed manufacturing overhead, allocated Total cost 15,000 Units per year $270,000 $180,000 $ 60,000 $135,000 $105.000 $750,000 $2 * One-third supervisory salaries; two-thirds depreciation of special equipment (no resale value) 19. What is the relevant cost, per unit, for Troy Engines to produce the carburetor? a. $34. b. $37. c. S40. d. 543. e. $50. 20. If the carburetors were purchased, Troy Engines, could use the freed capacity to launch a new product. The segment margin of the new product would be $70,000 per year. Should Troy Engines purchase the carburetors? a. No, as net operating income would decrease by $25,000 b. No, as net operating income would decrease by $45,000 c. Yes, as net operating income would increase by $25,000. d. Yes, as net operating income would increase by $45.000. e. Yes, as net operating income would increase by $70,000

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