EXERCISE 13-3 Making or buying a component Troy Engines, Ltd., manufactures engines for heavy equipment.

 $ 42                                                            $ 630

NOTE: * The identifiable fixed costs are composed of: One third of supervisory salaries, and two thirds of depreciation of special equipment (without resale value).

Is required:

1.a. Complete the following report assuming that the company has no other use for the facilities that are currently used to produce the thermostat

Differential Cost Analysis (Use total amounts in thousands)