Crist Company makes the plugs it uses in one of its products at a cost of $36 per unit. This cost includes $8 of fixed overhead. Crist needs 30,000 of these plugs annually, and Oplan Company has offered to sell them to Crist at $33 per unit. If Crist decides to purchase the plugs, $60,000 of the annual fixed overhead will be eliminated, and the company may be able to rent the facility previously used for manufacturing the plugs. Required:
1. If Crist Company purchases the plugs but does not rent the unused facility, the company would save or loss and by how much?
2. If the plugs are purchased and the facility rented, Crist Company wishes to realize $100,000 in savings annually. To achieve this goal, the minimum annual rent on the facility must be