Smithers Industries manufactures plastic bottles for the food industry. On average, Smithers pays $75 per tonne for its plastics. Smithers's waste disposal company has increased its waste disposal charge to $58 per tonne for solid and inert waste. Smithers generates a total of 500 tonnes of waste per month. Smithers's managers have been evaluating the production processes for areas to cut waste. In the process of making plastic bottles, a certain amount of machine "drool" occurs. Machine drool is the excess plastic that drips off the machine between moulds. In the past, Smithers has discarded the machine drool. In an average month, 140 tonnes of machine drool is generated. Management has arrived at three possible courses of action for the machine drool issue: (Click the icon to view the courses of action.) Requirements Total annual savings (net) 129,360 Requirement 3. How much would the company save per year (net) if the production process were to be reengineered? (Use parentheses or a minus sign to show amounts that will reduce the annual savings. Leave any unused cells blank.) Reduction in direct material costs (plastic) Reduction in hauling Amount received from local recycler Less annual cost to reengineer Total annual savings (net) Annual savings (net) Courses of action 1. Do nothing and pay the increased waste disposal charge. 2. Sell the machine drool waste to a local recycler for $19 per tonne. 3. Reengineer the production process at an annual cost of $65,000. This change in the production process would reduce the amount of machine drool by 40% each month. The remaining machine drool would then be sold to a local recycler for $19 per tonne. -