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. Voullo has just heard that QualSupport has received a bid from an outside vendor to supply the equivalent of the entire annual output of the Derver Cover Plant for $10.79 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 $23.09 milion. 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 57,400,000 Labor: Direct $ 7,200,000 Supervision 310,000 Indirect plant 2,100,000 9.610.000 Overhead: Depreciationquipment 1.200.000 Depreciation building 1.200,000 Pansion expense 1,700,000 Piant manager and staft 580.000 Corporate expenses 1.400.000 6,000,000 Total budguted costs $ 23,000,000 Fred corporate expenses allocated to plants and other operating units beved on total budgeted wage and lary conta Additional facts regarding the plant's operations are as follows: Due to Denver Cover's commitment to use high quality fabrics in all of its products, the Purchasing Department was instructed to place blanket purchase order with major suppliers to ensure the receipt of sufficient materials for the coming year I those orders are canceled as a consequence of the plant closing bermination charges would amount to 20% of the cost of direct materials b. Approximately 300 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, clectricians, and other skilled workers classified as indirect plant workers. Some would be able to find new jobs while marv others would have difficulty. All employees would have difficulty matching Denver Cover's bose pay of $13.30 per hour, which is the highest in the area. A cause in Denver Cover'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 50.86 million for the year c. Some employees would probably choose earty retirement because QualSupport has an excellent pension plan. In fact, 50.7 million of the annual pension expense would continue whether Denver Cover is open or not 0. Voslo and his stall would not be affected by the closing of Denver Cover. They would be responsible for administering the other area plants . If the Denver Cover Plant were closed, the company would realize about $1.48 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 Required: 2. Olupport Corpowtion plans to prepare a financial analyses that will be used in deciding whether or not to close the Denver Cover Plant Management has asked you to identy: The annual budged costs that are relevant to the decision regarding closing the plant b. The annual budgeted costs that are not relevant to the decision regarding closing the plant Any nonrecurring costs that would due to the closing of the plant 3 Looking at the date you have prepared above Calculate the financial advantage disadvantage of doing the Should the plant beca