Voslo 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 $20:54 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 $23.44 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 $ 7,000,000 Labor: Direct $7,100,000 Supervision 500,000 Indirect plant 1,588,888 9, 100, see Overhead: Depreciation- equipment 1,600,000 Depreciation- 1,400,000 building Pension expense 1,900,000 Plant manager and staff 640,000 Corporate expenses 1,800,000 7,340,000 Total budgeted $23,440,000 costs "Fixed corporate expenses allocated to plants and other operating units based on total budgeted wage and salary costs Additional facts regarding the plant's operations are as follows: a 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 orders with major suppliers to ensure the receipt of sufficient materials for the coming yesthese orders are canceled as a consequence of the plant dosing termination charges would amount to 25% of the cost of direct materials. b. Approximately 390 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, electricians, and other skilled workers classified as indirect plant workers Some would be able to find new jobs while many others would have dificut. Al employees would have difficulty matching Denver Cover's base pay of $11.60 per hour which is the highest in the area. Ad in Denver Cover's contract with the union may help some employees the company must provide employment assistance to former employees for 12 months after a plant closing The mated cost to minister the service would be on milion for the year Some employees would probably choose wyrement because Quasupport has an excelent pension plan. In fact. $05 mion of the annual pension expense would continue whether Denver Covers open or not d. Vosilo and his staff would not be affected by the closing of Denver Cover The would still be respons o r a ntering twee other area plants the Denver Cover Plant were closed, the company would realize about SUS Nage value for the equipment and building the plant remains open there are no plans to me e t investments in new equipment or buildings. The oldegimenta n do cing whether or not to close Required: 2. Cua Support Corporation plans to prese n ts that i n Die Denver Cover Management de The awal budgeted costs that are the decision regarding cough the anwar budgeted costs that are not re decision regarding o g Ar noring cents that would r e cogent WWW col or the She CA Complete this question by entering your answers in the tabs below