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Chapter 11 Graded Homework Sud Help Odywork 3 Exercise 11-3 (Algo) Make or Buy Decision (LO11-3) 25 pot 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 $34 per unit. To evaluate this offer, Troy Engines, Limited, has gathered the following information relating to its own cost of producing the carburetor Interney Front 21.000 DEN bit per vet Direct materials 518 #296.000 Diret Labor 12 252.000 Variable manufacture overhead 2 9.00 facturing overhead, raceable 18,00 Fixed acturing overhead allocated 12 259.000 Total coas BODO *One-third supervisory salaries two thirds depreciation of special equipment no resolo value) Required: 1. Assuming the company has no aitomotive use for the facilities that are now being used to produce the carburetors, what would be the financial advantage (disadvantage of buying 21000 carburetors from the outs de sopper? 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 $210,000 per year. Given this new assumption, what would be the financial advantage (disadvantage of buying 21000 Carburetors from the outside suplir? 4. Given the new assumption in requirement should the outside suppliers offer be accepted Complete this question by entering your answers in the tabs below. Check my work 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 $210,000 per year. Given this new assumption, what would be the financial advantage (disadvantage) of buying 21,000 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 ? Required 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 21,000 carburetors from the outside suppler Required 2 > UUSI Support 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. Tho segment margin of the new product would be $210,000 per year. Given this new assumption, what would be the financial advantage (disadvantage) of buying 21,000 carburetors from the outside supplier? 4. Given the new assumption in requirement 3, should the outside supplier's offer be accepted? Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required Required 4 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 $210,000 per year, Given the new assumption, what would be the financial advantage (disadvantage) of buying 21.000 carburetors from the outside supplier? Required a Requined 4

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