provide me the correct answer or else i will downgrade you.
"That old equipment for producing oil drums is wom out? said Bil Seebach. president of Hondrich Company. "We need to make a decision quickly. The company is trying to decide whether it should rent new equipment and contrive to make its oif drums internally or whether it should discontinue production and porchase them from an outside supplier. The alternatives follow: Aiternative 1: Rent new equipment for proctucing the oll drums for $92.000 per yeat Altemative 2. Purchase of drums from an outside supplier for $18.80 each. Hondrich Company's costs per unit of producing the oil drums internally (with the old equipment) are given below. These costs are based on a current activily level of 40,000 units per year: The new equipment would be more efficient and, according to the manufacturer. would reduce direct labour costs and variable overhead costs by 25%. Supervision cost (\$46.000 per year) and direct materials cost per unit would not be affected by the new equipment. The new equipment's capocity would be 50.000 oll drums per year. The total general company oyerhead would be unaffected by this decision. Requirect: 1. Seebach is unsure what the compary should do and would like an analysis showing the unit costs and total costs for each of the two alternotives given above. Assume that 40.000 oit drums are needed each year. a. What wili be the total relevant cost of 40,000 subassemblies if they ore manutactured internally as compored to being purchased? b. What would be the per unit cost of the each subassembly manufactured intemally? (Do not round intermediate caleulations. Round your answer to 2 decimal ploces.) c. Which course of action would you recommend to the president? Indifferent befween the two altematives Purchase from the outside supplier Manufacture internally 2. Seebach is unsure what the company should do and would like an analysis showing the unat costs and total costif for eacti of the two alternatives given above. a.1. What will be the total relevant cost of 46,000 subassemblies if they are manufactured internally? a.2. What would be the per unil cost of subassembly manufactured intemally? (Do not round intermediate caiculations. Anound your a.2. What would be the per unit cost of subassembly manufactured intemally? (Do not round intermediote colculations. Round your onswer to 2 decimol places.) 0-3. Which course of action would you recommend if 46.000 assemblles are needed each year?? Manufacture internally Purchase from the outside supplier Indifferent between the two alternatives b-1. What will be the total relevart cost of 50,000 subassemblies if they are marufactued intemaly? b-2. What would be the per unit cost of subassembly manufactured intemally? (Do not round intermediate calculations. Round your onswer to 2 decimbl ploces.) b-2. What would be the per unit cost of subassembly manufactured internally? (Do not round intermediate caleulations. Round your onswer to 2 decimal ploces.) b.3. Which course of action would you recommend if 50,000 assemblics are needed each year? Manufacture intemally Indifterent between the two alteinatives Purchase from the outside supplier 3. This port of the question is not part of your Connect assignment
