QualSupport Corporation manufactures seats for automobiles, vans, trucks, and various recreational vehicles. The company has a number of plants around. the world, including the Denver Cover Plant, which makes seat covers. Ted Vosilo is the plant manager of the Denver Cover Plant but also serves as the regional production manager for the company. His budget as the regional manager is charged to the Denver Cover Plant. Vosilo has just heard that QualSupport has received a bid from an outside vendor to supply the equivalent of the entire annual output of the Denver Cover Plant for $20.19 million. Vosilo was astonished at the low outside bid because the budget for the Denver Cover Plant's operating costs for the upcoming year was set at $23.49 million. If this bid is accepted, the Denver Cover Plant will be closed down. The budget for Denver Cover's operating costs for the coming year is presented below. Denver Cover Plant Annual Budget for Operating Costs Materials Labor: Direct Supervision Indirect plant $5,900,000 460,000 $ 8,600,000 1,600,000 7,960,000 Overhead: Depreciation-equipment Depreciation-building 1,500,000 1,500,000 Pension expense 1,900,000 Plant manager and staff 530,000 Corporate expenses* 1,500,000 6,930,000 Total budgeted costs $23,490,000 *Fixed corporate expenses allocated to plants and other operating units based on total budgeted wage and salary costs.