Tutstutt, Inc, sells a wide range of drums, bins, boxes, and other containers that are used in the chemical industry. One of the company's products is a heavy-duty corrosion-resistant metal drum, called the WWD drum, used to store toxic wastes. Production is constrained by the capacity of an automated welding machine that is used to make precision welds. A total of 2,300 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 2,875 drums. At present, the welding machine is used exclus?ely to make the WVD drums The accounting department has provided the tollowing financial data concerning the WVD drums: WVD Drums 5 157.00 Selling price per drum Cost per drum Direct materials Direct labor ($18 per hour) Manufacturing overhead Selling and administrative expense $44.80 4.50 3.45 15.70 68.45 $ 88.55 Margin per drum Management believes 3,375 WVD drums could be sold each year if the company had sutricient manufacturing capacity. As an alternative to adding another welding machine, management has considered buying additional drums from an outside supplier. Harcor Industries, Inc., a supplier of quality products, would be able to provide up to 1,500 WVD-type drums per year at a price of $100 per drum, which TufStuff would resell to its customers at its normal selling price after appropriate relabeling Megan Flores, Tustutrs production manager, has suggested that the company could make better use otthe welding machine by manufacturing bike trames, which would require only 0.2 hours of welding machine time per frame and yet sell for far more than the drums. Megan believes that TufStuff could sell up to 3,200 bike frames per year to bike manufacturers at a price of S68 each. The accounting department has provided the following data concerning the proposed new product: Bike Frames S 68.00 Selling price per frame Cost per frame Direct materials Direct labor ($18 per hour) Manufacturing overhead Selling and administrative expense S17.80 22.50 16.05 6.8D 63.15 S 4.85 Margin per frame