Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. futura company purchases the 67,000 starters that

Futura Company purchases the 67,000 starters that it installs in its standard line of farm...

90.2K

Verified Solution

Question

Accounting

image
Futura Company purchases the 67,000 starters that it installs in its standard line of farm tractors from a supplier for the price of $10.90 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 $1110 as shown below: If Futura decides to make the starters, a supervisor would have to be hired (at a salary of $100.500 ) 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 $83,000 per period. Depreciation is due to obsolescence rather than wear and tear. Required: What is the financial advantage (disadvantage) of making the 67,000 starters instead of buying them from an outside supplier

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Biology
1.2K views

CONCLUSIONS: What inputs are required for photosynthesis to produce oxygen and glucose? CONCLUSIONS: A student replicates all...

Biology
1.2K views

What is a key characteristic of a restriction endonuclease?They join broken strands togetherThere are many...

Biology
1.2K views

the body passes through the structures of the digestive system the following correctly represents the...

Physics
1.2K views

2 A current is flowing through a conductor which is in the shape of truncated...

Algebra
1.2K views

3 The table below represents the growth of an investment account over 3 decades What...

Algebra
1.2K views

K A worker invested 26 000 in two accounts one yielding 8 interest and the...

Accounting
1.2K views

Mary exchanges an apartment building (with an adjusted basis of $47,000 and FMV of $90,000)...

Accounting
1.2K views

Yorks outstanding stoxk consists of 85,000 shares of noncumulative 6.0% perferred stock with a $5...

Accounting
1.2K views

Reading the case study, can you identify and describe the foundational values of business ethics...

Accounting
1.2K views

A manufacturing company applies factory overhead based on direct labor hours. At the beginning of...

Accounting
1.2K views

On January 1, a $916,000, 10%, 5-year bond was issued for $888,520. Interest is paid...

Accounting
1.2K views

answer the following questions. Each response should have 100-150 words. Describe the five-stage model of...