That old equipment for producing oil drums is worn out" said Bill 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 continue to make its oil drums internally of whether it should discontinue production and purchase them from an outside supplier. The alternatives follow: Alternativet Rent new equipment for producing the oil drums for $100,000 per year. Alternative 2: Purchase oli drums from an outside supplier for $1740 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 activity level of 40,000 units per year: Direct materials Direct labour Variable overhead Fixed overhead ($1.25 supervision, $1.00 depreciation, and $4.00 general company overhead) Total cost per unit $6.00 8.00 3.20 7.05 $24.25 The new equipment uld be more efficient and, according to the manufacturer would reduce direct labour costs and variable overhead costs by 25%. Supervision cost (550,000 per year) and direct materials cost per unit would not be affected by the new equipment. The new equipment's capacity would be 62.500 oil drums per year The total general company overhead would be unaffected by this decision b-1. What will be the total relevant cost of 62,500 subassemblies if they are manufactured internally Totalt 12.00) b-2 What would be the per unit cost of subassembly manufactured internally? (Do not round Intermediate calculations. Round your answer to 2 decimal places.) Per un centros y b-3. Which course of action would you recommend if 62,500 assemblies are needed each year? Purchase from the outside supplier Indifferent between the two alternatives Manufacture Internally