Birds in Your Backyard produces a line of premium birdseed. Two of its products, flaxseed and safflower seed, are blended in the same machine center. This machine center operates two 2,000-hour shifts per year. Last year, the center processed 300,000 pounds of flaxseed and 650,000 pounds of safflower seed. The flaxseed has a cycle time of 20 seconds per pound and the safflower seed has a cycle time of 10 seconds per pound. Managed capacity costs last year were $2,000,000 and committed capacity costs were $1,533,000.
Required
a) Compute the machine center's cost per available hour.
b) Compute the total nonproductive cost.

Question

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The Answer of Birds in Your Backyard produces a line of premium birdseed. Two of its products, flaxseed and safflower seed, are blended in the same machine center. This machine center operates two 2,000-hour shifts per year. Last year, the center processed 300,000 pounds of flaxseed and 650,000 pounds of safflower seed. The flaxseed has a cycle time of 20 seconds per pound and the safflower seed has a cycle time of 10 seconds per pound. Managed capacity costs last year were $2,000,000 and committed capacity costs were $1,533,000.
Required
a) Compute the machine center's cost per available hour.
b) Compute the total nonproductive cost.

Birds in Your Backyard Produces a Line of Premium Birdseed