TufStuff, Inc., sells a wide range of drums, bins, boxes, and other containers that are used in the chemical drum, used to store toxic wastes. Production is ned by the capacity of an that is used to make precision welds. A total of 2,500 hours of welding time is available annually on the machine. Because each drum requires 0.8 hours of welding machine time, annual production is limited to 3,125 drums. At present, the welding machine is used exclusively to make the WWD drums. The accounting department has provided the following financial data concerning the WVD drums: 158.00 Cost per drum $45.60 4.50 4.25 16.5070.85 Manufacturing overhead drum $ 87.15 Management believes 3,625 WVD drums could be sold ach year if the company had sufficient manufacturing capacity. As an alternative to adding another welding buying additional drums from an outside supplier. Harcor Industries, Inc., a supplier of quality products, would be able to provide up to 2,000 WVD-type drums per year at a price of $150 per drum, which TufStuff would resell to its customers at its normal selling price after appropriate relabeling machine, manager, has suggested that the company could make better use of e by manufacturing bike frames, which would require only 0.2 hours of welding machine the welding time per frame and yet sell for far more than the drums. Megan believes that TufStuff could sell up to 4,000 bike frames per year to bike manufacturers at a price of $70 each. The accounting department has provided 70.00 $18.60 22.50 16.85 Direct labor ($18 per hour) overhead 7.60 65.55 $ 4.45