"in my opinion, we ought to stop making our own drums and accept that outside supplier's offer." said Wim Niewindt managing director of Antiles Refining, NV. of Aruba "At a price of $21 per drum, we would be paying $6.25 less than it costs us to manufacture the drums in our own plant. Since we use 75.000 drums a year that would be an annual cost savings of 5468,750."Antilles Refinings current cost to manufacture one drum is given below (based on 75,000 drums per year: $10.65 Direct saterials Direct labor Variable overhead Fixed overhead (53.40 general company overhead, 51.90 depreciation 300, S. 70 supervision Total cost per drum 6.00 $27.25 A decision about whether to make or buy the drums is especially important at this time because the equipment being used to make the drums is completely wom out and must be replaced. The choices facing the company are Alternativet. Rent new equipment and continue to make the drums. The equipment would be rented for $157,500 per year Alternative 2: Purchase the drums from an outside supplier at $21 per drum The new equipment would be more efficient than the equipment that Antilles Refining has been using and according to the manufacturer would reduce direct labor and variable overhead costs by 25%. The old equipment has no resale value Supervision cost (552,500 pet year and direct materials cost per drum would not be affected by the new equipment. The new equipment's capacity The company's total general company overhead would be unaffected by this decision, (Round an intermediate calculations to 2 decimal places Required: 1. Assuming that 75.000 drums are needed each year, what is the financial advantage disadvantage of buying the drums from an outside Supplier 2. Assuming that 87.500 drums are needed each year what is the financial advantage disadvantage of buying the drums from an 3. Assuming that 105.000 drums are needed each year, what is the financial advantage disadvantage) or buying the drums from an Outside Supplier For all requirements, enter any disadvantages as a negative value. Do not round intermediate calculations Pro Needs Tescolada Ang