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Futura Company purchases the 77,000 starters that it installs in its standard line of farm tractors from a supplier for the price of S1170 per

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Futura Company purchases the 77,000 starters that it installs in its standard line of farm tractors from a supplier for the price of S1170 per unit. Due to a reduction in output the company now tias 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 $12.70 as shown below: If Futura decides to make the starters, a supervisor would have to be hired (at a salary of $123.200 ) to oversee production. However. the company has sufficlent idle tools and machinery such that no new equipment would have to be purchased. The rent charge above is bosed on spoce utifized in the plant. The total rent on the plant is $88,000 per period. Depreciation is due to obsolescence rather then wear and tear. Aequired: What is the financial advisntage (disadvantage) of making the 77.000 starters insteod of buying them from an outside supplier

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