Week 7 Homework Saved Help Save & Exit Submit Check my work 3 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 $36 per unit To evaluate this offer, Troy Engines, Limited, has gathered the following Information relating 10 to Its own cost of producing the carburetor Internally points 20, 080 Units Per Unit per Year eBook Direct materials $ 13 $ 260, 600 Direct labor 11 220, 900 Hint Variable manufacturing overhead 80, 000 Fixed manufacturing overhead, traceable 120, 860 Ask Fixed manufacturing overhead, allocated 180, 060 Print Total cost $ 43 $ 860,060 One-third supervisory salaries, two-thirds depreciation of special equipment (no resale value) References 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 20,000 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 $200,000 per year, Given this new assumption, what would be the financial advantage (disadvantage) of buying 20,000 carburetors from the outside supplier? 4. Given the new assumption in requirement 3, should the outside supplier's offer be accepted? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Assuming the company has no alternative use for the facilities that are now being used to produce the carburetors, what wand ha the financial advantane (dleadsantana) of hiring on non -ashuratore from the outside sunnliar? Me Grav 10:00 PM