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1 "Th my opinion, we ought to stop making our own drums and accept...

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Accounting

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"Th my opinion, we ought to stop making our own drums and accept that outside supplier's offer," said Wim Niewindt, managing director of Antilles Refining. N.V., of Aruba. "At a price of 66 florins per drum, we would be paying 10 fiorins less than it costs us to manufacture the drums in our own plant. Since we use 120,000 drums a year, we would save 1,200,000 florins on an annual basis: (The currency in Aruba is the florin, denoted by Afl.) Antilles Refining's present cost to manufacture one drum follows (based on 120,000 drums per year):
\table[[Direct material,Af 125.70],[Direct labour,17.00],[Variable overhead,8.00],[Fixed overhead (Af110.60 general company overhead, Af18.20,25.30?
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