Futura Company purchases the 40,000 starters that it installs in its standard line of farm idle capacity that could be used to produce the starters rather than buying them from an outside from a supplier for the price of $8.40 per unit. Due to a reduction in output, the company now bas supplier. However, the company's chief engineer is opposed to making the starters because the tractors EXERCISE 6-10 Make or Buy Decision L06-3 production cost per unit is $9.20 as shown below: Per Unit Total $3.10 2.70 1.50 1.00 0.60 0.30 $9.20 Direct materials Direct labor... Supervision. Depreciation... Variable manufacturing overhead Rent... Total production cost $60,000 $40,000 $12,000 If Futura decides to make the starters, a supervisor would have to be hired (at a salary of $60,000) to oversee production. However, the company has sufficient idle tools and machinery such that no new equipment would have to be purchased. The rent charge above is based on space utilized in the plant. The total rent on the plant is $80,000 per period. Depreciation is due to obso lescence rather than wear and tear. Required: What is the financial advantage (disadvantage) of making the 40,000 starters instead of buying them from an outside supplier