Company management estimates that revenue for the new product will be $212.00 per unit. It will take twice as long to produce a unit of SEC on M2 as it does to produce a unit of EC on M1, but inspection time will remain the same. Variable overhead costs on the M2 are expected to 25% higher per machine hour than on M1. In addition to the EC board, $65.00 of materials will be added to complete the SEC. Webster plans to operate the M2 on the same basis it operates M1. If the demand for the product is sufficient, M2 would operate 6,000 hours per year. 1