Currently, we have a policy to carry about 15 tons of LLHC in inventory. Our current costing system totally ignores the cost of carrying this inventory. Since it costs us $1,665 to produce each ton of this product, we are tying up a lot of money in inventory—money that could be invested in other productive opportunities. In fact, the return lost is about 10% per year. This cost should also be assigned to the units sold.