An analysis by Deep Earth Oil Refinery recommends buying oil containers from an outside supplier for $$18$ per container. $$The analysis shows the company would be paying $$5$ less than it costs to manufacture the containers in its own plant.$$ According to the analysis, since they use $60,000$ containers a year, that would be an annual cost savings of $$300,000.$ Deep Earth$$s present cost to manufacture one container is given below.$$Based on normal production of $60,000$ units per year.$$ Direct materials$$ $$10\mathrm{.}35$ Direct labor$6\mathrm{.}00$ Variable overhead$1\mathrm{.}50$ Fixed overhead $($$$2\mathrm{.}80$ general company$$overhead$,$ $$1\mathrm{.}60$ depreciation, and $$\mathrm{.}75$supervision$)5\mathrm{.}15$ Total cost per container$$ $$23\mathrm{.}00$The choices facing the company are:$$Alternative $1$:$$ Purchase new equipment and continue to make the containers.$$ The equipment would cost $$810,000$; it would have a six$-$year useful life and have no salvage value.$$ The company uses straight$-$line depreciation.$$ The new equipment would be more efficient than the old equipment and would reduce direct labor and variable overhead costs by $30$ percent.$$ Supervision costs $($$$45,000$ per year$)$ and direct materials cost per container would not be affected by the new equipment.$$ The new equipment$$s capacity would be $90,000$ containers per year.$$ The company has no other use for the space now being used to produce the containers.$$Alternative $2$:$$Purchase the containers from an outside supplier at $$18$ per drum under a six$-$year contractPrepare an incremental $($make or buy$)$ analysis showing both the total costs and the cost per container under each of the two alternatives. Assume that $60,000$ containers are needed each year.$$ Make a recommendation to the president.Prepare a new analysis assuming that $75,000$ containers per year are needed.$$ Does your recommendation change?$$ If so$,$ explain why.Prepare a new analysis assuming that $90,000$ containers per year are needed.$$ Does your recommendation change?$$ If so$,$ explain why.