Exercise 11-10 (Algo) Make or Buy Decision [LO11-3] Futura Company purchases the 74,000 starters that it instalis in its standard line of farm tractors from a supplier for the price of $12.00 per unit. Due to a reduction in output, the company now has idle capacity that could be used to produce the starters rather than buying them from an outside suppliet. However, the company's chief engineer is opposed to making the starters because the production cost per unit is $12.80 as shown below: If Futura decides to make the starters, a supervisor would have to be hired (ot a salary of \$118.400) to oversee production. However. then company has sutticient idte toos and machinery such that no new equipment would have to be purchased. The rent charge above is based on space utitized in the plant. The total rent on the plant is $89,000 per period. Depreciation is due to obsolescence rather than wear and tear. Required: What is the financial advantage (disadvantage) of malang the 74,000 starters instead of buying them from an outtide suppler