Howe Paper, Inc

Multiple Choice

Howe Paper, Inc., produces a number of products, including a replacement filter bag for a popular vacuum cleaner. The filter bags pass through a machine center where the paper pieces are joined with an adhesive. This machine center operates a single eight-hour daily shift totaling 2,000 hours in each 8,760-hour year. Cycle time for each bag is 10 seconds, and in the just-concluded year, 600,000 filter bags were produced. The total committed costs of running the machine center for the year were $70,080, and the total managed costs were $80,000.
-What was the idle capacity for the year just concluded?

A) 1,200,000 seconds
B) 24,336,000 seconds
C) 25,536,000 seconds
D) 30,336,000 seconds