1. Computation of Financial Advantage / ( Disadvantage)- Troy Engine- Carburetors | ||
Make | Buy | |
Direct Material | $294,000.00 | |
Direct Labour | $252,000.00 | |
Variable Manufacturing Overhead | $42,000.00 | |
Fixed Manufacturing Overhead , Traceable (189000/3) | $63,000.00 | |
Purchase Cost (21000*34) | $714,000.00 | |
Total Relevant Cost | $651,000.00 | $714,000.00 |
Financial Advantage (Disadvantage) = 651000-714000 = -$63000 |
2. No Offer Should not be accepted |
3. Computation of Financial Advantage / ( Disadvantage)- Troy Engine- Carburetors | ||
Make | Buy | |
Direct Material | $294,000.00 | |
Direct Labour | $252,000.00 | |
Variable Manufacturing Overhead | $42,000.00 | |
Fixed Manufacturing Overhead , Traceable (189000/3) | $63,000.00 | |
Opportunity Cost | $210,000.00 | |
Purchase Cost (21000*34) | $714,000.00 | |
Total Relevant Cost | $861,000.00 | $714,000.00 |
Financial advantage (Disadvantage) = 861000-714000 = $147000 |
4) Yes, Order Should Be Accepted |
Troy Engines, Ltd., manufactures a variety of engines for use in heavy equipment. The company has...
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 $34 per unit. To evaluate this offer, Troy Engines, Ltd., has gathered the following information relating to its own cost of producing the carburetor internally: Per Unit 21,000 Units Per...
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 $34 per unit. To evaluate this offer, Troy Engines, Ltd., has gathered the following information relating to its own cost of producing the carburetor internally: *One-third supervisory salaries; two-thirds depreciation...
2 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: 5 Joints Unit eBook...
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 $36 per unit. To evaluate this offer, Troy Engines, Ltd., has gathered the following information relating to its own cost of producing the carburetor internally: 15,000 Units Per Unit Year...
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 $32 per unit. To evaluate this offer, Troy Engines, Ltd has gathered the following information relating to its own cost of producing the carburetor internally Direct materials Direct labor Variable...
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 $35 per unit. To evaluate this offer. Troy Engines, Ltd. has gathered the following information relating to its own cost of producing the carburetor internally Per Unit $ 14 19...
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 $36 per unit. To evaluate this offer, Troy Engines, Ltd., has gathered the following information relating to its own cost of producing the carburetor internally: Direct materials Direct labor Variable...
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 $36 per unit. To evaluate this offer, Troy Engines, Ltd., has gathered the following information relating to its own cost of producing the carburetor internally: Direct materials Direct labor Variable...
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 $36 per unit. To evaluate this offer, Troy Engines, Ltd., has gathered the following information relating to its own cost of producing the carburetor internally: Direct materials Direct labor Variable...
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 $37 per unit. To evaluate this offer, Troy Engines, Ltd., has gathered the following information relating to its own cost of producing the carburetor internally: 23,000 Units Per Unit...