Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. hw3 futura company purchases the 68,000 starte

hw3 Futura Company purchases the 68,000 starters that it installs in...

90.2K

Verified Solution

Question

Accounting

hw3
image
Futura Company purchases the 68,000 starters that it installs in its standard line of farm tractors from a supplier for the price of $10.40 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 engincer is opposed to making the starters because the production cost per unit is $11.80 as shown below: If Futura decides to make the starters, a supervisor would have to be hired (at a salary of $136,000) to oversee production. However. the company has sufficient idle tools and machinery such that no new equlpment would have to be purchased. The rent charge above is based on space utilized in the plant. The totai 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 (disadvantage) of making the 68,000 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

Q

Section 1 Tennis players often spin a racquet to decide who serves first. Th e spun racquet...

Basic Math
Q

how does research bias take the form of a self fulfilling prophecy ch 2

Psychology
Q

TOPIC 1: Companies are required to classify cash flows as operating, investing, or financing. Which of...

Operations Management
Q

Company sells its product for $170 per unit. Its actual and budgeted sales follow. Units Dollars...

Accounting
Q

Campbell Food Distribution pays Kim Cox a 2850 monthly salary plus a 14 commission on...

Basic Math
Q

Interpreting technology The following display from the TI 84 Plus calculator presents the least squares...

Statistics
Q

A 2021 study by UCI researchers examined the health outcomes of a very large cohort...

Statistics
Q

A binomial probability experiment is conducted with the given parameters Compute the probability of x...

Statistics
Q

Find lim x y 0 0 w 3e sin 2x 5x 3e sin 2x lim...

Calculus
Q

Write a function that describes the cost of hiring the painter in terms of the...

Algebra
Q

c d 3 2x50 1 2 28 2

Algebra
Q

Dr. Hu owns 1,008 shares of EVKars Ltd. They have an ACB of $32 a...

Accounting