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Fitura Company purchases 40,000 starters ftom a supplier at $8.40 per unit that it installs in farm tractors. Due to a reduction in output, the

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Fitura Company purchases 40,000 starters ftom a supplier at $8.40 per unit that it installs in farm tractors. Due to a reduction in output, the company now has enough idle capacity to produce the starters rather than buying them from the supplier. However, the company's chicf engineer is opposed to making the starters because the production cost per unit is $9.20, as shown befow: If Futura decldes to make the starters, a supervisor would be hired (at a salary of 560,000 ) to oversee production. However, the company has sufficient idle tools and machinery such that no now equipment would have to be purchased. The rent charge above is based on space utilized in the plant. The totaif rent on the plant is $80.000 per period. Required: What is the financial odvantege (fisedvantape) of making the 40,000 starters instead of buying them from an outside supplier? Fitura Company purchases 40,000 starters ftom a supplier at $8.40 per unit that it installs in farm tractors. Due to a reduction in output, the company now has enough idle capacity to produce the starters rather than buying them from the supplier. However, the company's chicf engineer is opposed to making the starters because the production cost per unit is $9.20, as shown befow: If Futura decldes to make the starters, a supervisor would be hired (at a salary of 560,000 ) to oversee production. However, the company has sufficient idle tools and machinery such that no now equipment would have to be purchased. The rent charge above is based on space utilized in the plant. The totaif rent on the plant is $80.000 per period. Required: What is the financial odvantege (fisedvantape) of making the 40,000 starters instead of buying them from an outside supplier

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