$"$In 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 $$21$ per drum, we would be paying $$6\mathrm{.}05$ less than it costs us to manufacture the drums in our own plant. Since we use $70,000$ drums a year, that would be an annual cost savings of $$423,500."$ Antilles Refining's current cost to manufacture one drum is given below $($based on $70,000$ drums per year$)$:

$\backslash$table$[[$Direct materials,$$11\mathrm{.}00$