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Futura Company purchases the 62.000 starters that it installs in its standard line of farm...

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Accounting

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Futura Company purchases the 62.000 starters that it installs in its standard line of farm tractors from a supplier for the price of $11.30 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 the production cost per unit is $11.80 as shown below Ter wilt Yata Die stories 34.00 Direct la Supervisi $ 99,200 preciation $9.00 Variable facturing what $24.0 Total product out 10 If Futura decides to make the starters a supervisor would have to be hired in a salary of $99 2001 to oversee production. Howeves the company has sufficient idle tools and machinery such that no new equipment would have to be purchased. The cent charge above is based on space utilized in the plant. The total rent on the plant is $89.000 per period. Depreciation is due to obsolescence rather than wear and tear Required: What is the financial advantage (disadvantages of making the 62.000 starters instead of buying them from an outside supplier

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