Question: i need typed answer with proper explanation and don't use ai bot give me a step by step proper explanation i will thumb. Troy Engines

i need typed answer with proper explanation and don't use ai bot give me a step by step proper explanation i will thumb.

i need typed answer with proper explanation and
Troy Engines manufactures a variety of engines for use in heavy equipment. The company has always produced all of the necessary parts for it's engines, including all of the carburetors. An outside supplier has offered to produce and sell one type of carburetor to Troy Engines for a cost of $32 per unit. To evaluate this offer, Troy Engines has gathered the following information relating to its own cost of producing 15.000 units of the carburetor internally. Cost per Unit Cost, 15.000 units per year Direct Materials $14.00 $210,000 Direct Labor 10 00 150.000 Variable Overhead 45.000 Fixed Overhead, Traceable" 90.000 Fred Overhead, Allocated 200 135 000 Total Cost $42.00 $630.000 "comprised of supervisor's salary, $30,000 per year, and a non-cancellable equipment lease, $40 000 per year The decision to continue producing or to buy the carburetors would have no effect on Troy's general overhead. If the company accepts the outside supplier's offer, the supervisor's position would be eliminated. Suppose that if the carburetors were purchased. Troy Engines could leave the freed-up space to another company. The rental income would be $150,000 per your, In view of this additional information. should Troy Engines accept the offer to buy the carburetors for $32 per unit? (Pick best answer) @ You because the het advantage of the "buy option of $165,000 @) Yet, because the not advantage at the "buy. option is $75 000 No. because the net disadvantage of the "buy option a $195,000 O You, because the net advantage of the "buy * option is $105,009

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!