I need a two page managerial policy report based on this information.

Case Keep or Drop Decision Sumpter Corporation manufactures seats for automobiles, vans, trucks, and various recreational vehicles. The company has a number of plants around the world, including the Charleston Plant, which makes seat covers. Ted Vosilo is the plant manager of the Charleston Plant but also serves as the regional production manager for the company. His budget as the regional manager is charged to the Charleston Plant. Vosilo has just heard that Sumpter has received a bid from an outside vendor to supply the equivalent of the entire annual output of the Charleston Plant for $35 million. Vosilo was astonished at the low outside bid because the budget for the Charleston Plant's operating costs for the upcoming year was set at $52 million. If this bid is accepted, the Charleston Plant will be closed down. The budget for Charleston's operating costs for the coming year is presented below. Charleston Plant Annual Budget for Operating Costs Materials $ 14,000,000 Labor: Supervision 900,000 Indirect plant Overhead: _ Depreciationequipment | 3,200,000 Depreciationbuilding 7,000,000 Pension expense 5,000,000 Plant manager and staff 800,000 Corporate expenses' 4,000,000 20,000,000 Total budgeted costs | $52.000,000 \"Fixed corporate expenses allocated to plants and other operating units based on total budgeted wage and salary costs. Additional facts regarding the plant's operations are as follows: a. Due to Charleston's commitment to use high-quality fabrics 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 plant closing, termination charges would amount to 20% of the cost of direct materials. b. Approximately 400 plant employees will lose their jobs if the plant is closed. This includes all of the direct laborers and supervisors as well as the plumbers, electricians, and other skilled workers classified as indirect plant workers. Some would be able to find new jobs while many others would have difficulty. All employees would have difficulty matching Charleston's base pay of $18.80 per hour, which is the highest in the area. A clause in Charleston's contract with the union may help some employees; the company must provide employment assistance to its former employees for 12 months after a plant closing. The estimated cost to administer this service would be $1.5 million for the year. . Some employees would probably choose early retirement because Sumpter has an excellent pension plan. In fact, $3 million of the annual pension expense would continue whether Charleston is open or not. d. Vosilo and his staff would not be affected by the closing of Charleston. They would still be responsible for administering three other area plants. e. If the Charleston Plant were closed, the company would realize about $3.2 million salvage value for the equipment and building. If the plant remains open, there are no plans to make any significant investments in new equipment or buildings. The old equipment is adequate and should last indefinitely. Questions 1. Without regard to costs, identify the advantages to Sumpter Corporation of continuing to obtain covers from its own Charleston Plant. 2. Sumpter Corporation plans to prepare a financial analysis that will be used in deciding whether or not to close the Charleston Plant. Management has asked you to identify: a. The annual budgeted costs that are relevant to the decision regarding closing the plant (show the dollar amounts). b. The annual budgeted costs that are irrefevant to the decision regarding closing the plant and explain why they are irrelevant (again show the dollar amounts). . Any nonrecurring costs that would arise due to the closing of the plant, and explain how they would affect the decision (again show any dollar amounts). 3. Looking at the data you have prepared in (2) above, what is the financial advantage (disadvantage) of closing the plant? Show computations and explain your answer. 4. Identify any revenues or costs not specifically mentioned in the problem that Sumpter should consider before making a decision