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of $10.50 per unit. Due to a reduction in output, the company now has idle capacity that could be used to produce the starters rather

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of $10.50 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 supplier. However, the company's chief engineer is opposed to making the starters because production cost per unit is $11.10 as shown below Per Unit Total 4.00 Direct materials Direct labor Supervision Depreciation Variable manufacturing overhead .80 Rent Total product cost 3.28 1.60 $100,880 1.10 69,300 .4e $ 25,200 $11.10 to make the starters, a supervisor would have to be hired (at a salary of $100.800) to oversee production. However hve to be purchased The rent charge above equipment would based on space utilized in the plant. The total rent on the plant is $83,000 per period. Depreciation is due to obsolescencer than wear and tear. the company has sufficient idle tools and machinery such that no new Required What is the financial advantage (disadvantage) of making the 63,000 starters instead of buying nancial advantage

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