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Exercise 11-10 (Algo) Make or Buy Decision [LO11-3] Futura Company purchases the 67,000 starters that it installs in its standard line of farm tractors from

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Exercise 11-10 (Algo) Make or Buy Decision [LO11-3] Futura Company purchases the 67,000 starters that it installs in its standard line of farm tractors from a supplier for the price of $13.00 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 suppller. However, the company's chief engineer is opposed to making the starters because the production cost per unit is $13.40 as shown below: If Futura decides to make the starters, a supervisor would have to be likred (at a salary of $93.800 ) to oversee production. Howerver, the company has sufficlent ide tools and machinery such that no new equipnent would have to be purchased. The rent charge above is based on space utilized in the plint. The total rent on the plant is $8 t.000 per period. Depreciation is due to obsolescence rather than wear and teac. Required: What is the financial advantage (disadvantage) of making the 67,000 starters instead of buying them from an outside supplier

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