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ms excel or handwritten pls That old equipmest foc producint oil drums is wora out, sasd Bial Secbach, president of Hondrich Company. We need to
ms excel or handwritten pls
"That old equipmest foc producint oil drums is wora out," sasd Bial Secbach, president of Hondrich Company. "We need to make a deciston quiekty" The conspany is trying to decide whether it stoold rent new equipment and continen to mase its oll drams internally of whether it shonid discontinne productioa and purchase them from an outside supplier. The alfernatives folion: Alterattive t: Rent ater equipmeat for producing the oal drams for $120.000 per year. Afternative 2 Purchasa oil dirans trom an ontide suppSer for $16 each. 40,000 natius per year Direct materials Direct taboar Vuriable wethnad Fixtd ovethetd ( 81.50 maperition. 31.30 depreclation. and 41 general compeny ovezhesd) Total cais per unit (560,000 per year) and direct muterials cost per enit wootd not be atfected by the nee equipmeat. The new equipmetars capacity woeld be 60,000 oil drums per year, The total general compaby orethead wodld be enaffected by this decision. Regatrele that 40,000 oil drums are needed each yeat. Which courre ol action would you recommend to Secbach? 2. Would your tecommendation fa (1) above be the stme if the company's needs wert (a)50,000 oil drums ger jeat, or (B) 60,000 oll drams geryeant show cothputations in good form. 3. What ohber factors woold you recommend that Seebach consider before matiog a decision Step by Step Solution
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