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i Chrome File Edit ie History Bookmarks People Window Help Garrison CH 12 Exercises l@ ezto.mheducation.com/hm.tpx D. Sun 1:56 PM a E Chegg.com x , e Chegg Study Guided Solutio SOLUTIONS EXPERTQ&A; value: 4.28 points ...or chat with a tutor Troy Engines, Ltd., 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, Ltd., for a cost of $33 per unit. To evaluate this offer, Troy Engines, Ltd., has gathered the following information relating to its own cost of producing the carburetor internally: Get live help within 5 minutes PM Screen Shot 15-0...9.37 PMM 15,500 Per Units Unit Per Year $ 9 $139,500 11 170,500 15,500 9* 139,500 13 201,500 Direct materials Direct labor Fixed manufacturing overhead, traceable Fixed manufacturing overhead, allocated Screen Shot 15-0...3.09 AM Total cost $ 43 $666,500 "40% supervisory salaries: 60% depreciation of special equipment (no resale value). Screen Shot 2015-0... 7.55 PM Required: 1a. Assuming that the company has no altemative use for the facilities that are now being used to produce the carburetors, compute the total cost of making and buying the parts. (Round your Fixed manufacturing overhead per unit rate to 2 decimals.) Screen Shot 2017-0...5.55 PM Make Buy Total relevant cost (15,500 units) can find the right Chegg Expert) 1b. Should the outside supplier's offer be accepted? POST QUESTION cklist.pdf O Reject Accept 15 questions remaining this subscription period 2a. Suppose that if the carburetors were purchased, Troy Engines, Ltd., could use the freed capacity to launch a new product. The segment margin of the new product would be S144,200 per year. Compute 5

Explanation / Answer

1a Make Buy Per unit 15500 units Per unit 15500 units Direct materials 9 139500 Direct labor 11 170500 Variable manufacturing overhead 1 15500 Fixed manufacturing overhead,traceable 3.6 55800 Purchase cost 33 511500 Total relevant cost 381300 511500 b Reject 2a Make Buy Total cost(above) 381300 511500 Opportunity cost 144200 Total relevant cost 525500 511500 2b Accept

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