Bye-Bye Varmint Company Produces a Liquid Rodent Repellant That Is

Multiple Choice

Bye-Bye Varmint Company produces a liquid rodent repellant that is packaged and sold in one-liter spray bottles. A single machine that is operated for two, 8-hour daily shifts, five days per week for 50 weeks each year blends the ingredients in the repellant. The annual committed costs of running the machine are $2,628,000, and the managed costs are $1,600,000.
- Determine the committed cost per hour.

A) $300
B) $657
C) $1,314
D) $700