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Exercuse 13-3 (Algo) Make or Buy Decision [LO13-3]

Troy Engines, Limited, manufactures a variety of engines for use in heavy equipment. The company has always produced alf of the necessary parts for its engines, including all of the carburetors. An outside supplier has offered to sell one fype 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: Required: 1. Assuming the company has no altemative use far the factities that are now being used to produce the carburetors what would bo the financial advartage fichadvantage) of buging 12,000 carburetors from the autside suppher? 2. Should the outside supplier s offer be accepted 3. Suppone tor if the carburetors were purchased, Trov enoines. Limitedi could use the fieed capecity to launch a bew product. The segmentmarg of the new product would be s120.000 peryea. G.ven the new astumption, what wovla be the financial advantage (a) sadvartage) of buying l 12000 caiburetors foom the outside suppher? 4 Given the new assumption in requireinent a shouid the outside suppliers offer be accepted? Complete this question by entering your answors in the tabs bolow. Mssuming the coknamy tias no alternative use for the facilieies that are now being usod to produce the carburetori, what would bo the financial advantide (disadvantage) of buying 12,000 carburetors from the outside aupgliat? Segment margin of the new product would be \$1u,vuU per year Given this new assumption, what would be the financial advantage (disadvantage) of buyling 12,000 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. Should the outside supplier's offer be accepted? egment margin of the new product would be \$120,uuU per year Given this new assumpton, what wouid be the tinariciar advantage: disadvantage) of buying 12.000 carburetors from the outside supplier? 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. Suppose that if the carburetors were purchased, Troy Engines, Limited, could use the freed capacity to launch a now product The negment margin of the new product would be $120,000 por yeat Glven this mew assumption, what would be the fifandal Advantage (disadvantage) of biying 12.000 carburetons from the outside supplier? segment margin of the new product wouto be 1_u,uUU per year Given this new assumpnon, what would be the financiat advartage (disadvantage) of buying 12.000 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. Given the new assumption in requirement 3, should the outside supplier's offer be accepted? Exercise 13-3 (Algo) Make or Buy Decision [LO13-3] 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 $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: 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 financlal advantage (disadvantage) of buying 12.000 carburetors from the outside supplie?? 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 $120,000 per year, Given this new assumption, what would be the financial advantage (disachvantage) of buying 12.000 carburetors from the outside supplier? 4. Glven 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. 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 12,000 carburetors from the outside supplier? segment margin of the new product would be $1U, UU per year. Given this new assumption, what would be the financial advantag (disadvantage) of buying 12,000 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. Should the outside supplier's offer be accepted? Complete this question by entering your answers in the tabs below. 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 $120,000 per year. Given this new assumption, what would be the financial advantage (disadvantage) of buying 12,000 carburetors from the outside suppller? segment margin of the new product would be $1U,U per year. Given this new assumption, what would be the financial advi (disadvantage) of buying 12,000 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. Given the new assumption in requirement 3 , should the outside supplier's offer be accepted

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