Factory Closing Decision The Dough Knot Corporation bakes bread, pastries, cookies, and every other baked good imaginable. The company has a number of factories around the world, including the ELAC Cookie Factory, which makes… cookies. Michael Schrute is the factory manager of the ELAC Cookie Factory but also serves as the regional production manager for the company. His budget as the regional manager is charged to the ELAC Cookie Factory. Schrute has just heard that The Dough Knot has received a bid from an outside vendor to supply the equivalent of the entire annual output of the ELAC Cookie Factory for $35 million. Schrute was astonished at the low outside bid because the budget for the ELAC Cookie Factory’s operating costs for the upcoming year was set at $52.0 million. If this bid is accepted, the ELAC Cookie Factory will be closed down. 

The budget for ELAC Cover’s operating costs for the coming year is presented below.

ELAC Cookie Factory Annual Budget for Operating Costs

Baking flour $ 3,000,000

Baking employees 13,100,000

Butter 3,500,000

Chocolate 2,500,000

Cleaning employees 2,500,000

Corporate expenses 4,000,000

Depreciation-building 7,000,000

Depreciation-equipment 3,200,000

Pension expense 5,000,000

Factory manager and staff 800,000

Security employees 1,500,000

Sugar 5,000,000

Supervisors 900,000

Total budgeted costs $ 52,000,000

What will be The annual budgeted costs that are relevant to the decision regarding closing the factory.