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Futura Company purchases the 71,000 starters that it installs in its standard line of farm tractors from a supplier for the price or $12.50 per

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Futura Company purchases the 71,000 starters that it installs in its standard line of farm tractors from a supplier for the price or $12.50 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 becouse the production cost per unit is $13,90 as shown below: If Futura decides to make the starters, a supervisor would have to be hired (at a salary of $142,000 ) to oversee production. However. the company has sufficient idle tools and machinery such that no new equipment would havo to be purchased. The rent charge above is based on spece utlized in the plant. The total rent on the plant is $87,000 per period. Deprociation is due to obsolescence rather than wear and tear. Required: What is the financial advantage (disadvantage) of making the 71,000 starters insteod of buying them from an outside supplier

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