4 "In my opinion, we ought to stop making our own drums and accept that outside supplier's offer said Wim Niewindt, managing director of Antilles Refining, NV, of Aruba "At a price of $19 per drum, we would be paying $5.45 less than it costs us to manufacture the drums in our own plant. Since we u 85.000 drums a year, that would be an annual cost savings of $463.250. Antiles Refining's current cost to manufacture one drum is given below based on 85,000 drums per yeary $10.70 5.50 1.50 Direct tertain Dit labor Variable onthaad Tierheed 103.10 general company overhead, 11.5 t, and 11.00 supervision als per du 5 28.45 A decision about whether to make or buy the drums is especially important at the time because the equipment being used to make the drums is completely worn out and must be replaced. The choices facing the company ore Art Bent new equipment and continue to make the drums. The equament would be rented for $285,000 per year. Alative Purchase the drums from an outside supplier at $19 per drum The new woment would be more efficient than the equipment that Antilles Refining has been using and according to the manufacture, would reduce direct labor and variable overhead costs by 30% The old equipment has no resale value Supervision cost SS.000 per year) and direct materials cost per drum would not be affected by the new equipment. The new equipment's capacity would be 125.000 drum per year The company's total general company overhead would be unaffected by this decision Required Assuming that 85.000 drums are needed each yeat what is the financial advantage disadvantage of buying the drums from an out de support 2. Athat 100.000 drums are needed each year, what is the financial advantage disadvantage of buying the drums from an 3 Assuming 125.000 drums are needed each year, what is the financial advantage disadvantage of buying the drums from an outside supplier For all reglaments, enter any disedvantages as a negative value. Do not round Intermediate calculations 3.000 100.000 125.000 Dadvantage Be there 5 SOOC 15,000 5 45.000 12 a LI