Factory Closing Decision The Dough Knot Corporation bakes breads, pastries, cookies and every other baked good imaginable. The company has a number of factories around the world, including the ELAC Cookie Factory, which makes... cookies. Michael Schrute is the factory manager of the ELAC Cookie Factory but also serves as the regional production manager for the company. His budget as the regional manager is charged to the ELAC Cookie Factory. Schrute has just heard that The Dough Knot has received a bid from an outside vendor to supply the equivalent of the entire annual output of the ELAC Cookie Factory for $34 million. Schmte was astonished at the low outside bid because the budget for the ELAC Cookie Factory's operating costs for the upcoming year was set at $50.3 million. If this bid is accepted, the ELAC Cookie Factory 1will be closed down- The budget for ELAC Cover's operating costs for the coming year is presented below. ELAC Cookie Factory Annual Budget for Operating Costs Baking flour $ 2,500,000 Baking employees 12,000,000 Butter 3,700,000 Chocolate 2,400,000 Cleaning employees 1,500,000 Corporate expenses 3,800,000 Depreciation-building 6,000,000 Depreciationequipment 3,500,000 Pension expense 4,000,000 Factory manager and staff 900,000 Security employees 3,000,000 Sugar 6,000,000 Supervisors 1,000,000 Total budgeted costs $ 50,300,000 *Fixed corporate expenses allocated to factories and other operating units based on total budgeted wage and salary costs. Additional facts regarding the factory's operations are as follows: a. Due to ELAC Cookie's commitment to use high-quality ingredients in all of its products, the Purchasing Department was instructed to place blanket purchase orders with major suppliers to ensure the receipt of sufficient materials for the coming year. If these orders are canceled as a consequence of the factory closing, termination charges would amount to 25% of the cost of direct materials