Using the Original Design, a Machine Requires 12 Hours of Setup

Multiple Choice

Using the original design, a machine requires 12 hours of setup time. By redesigning the machine, the setup time is reduced by 25%. The cost per setup hour is $225. Calculate the reduction in nonvalue-added cost per setup.

A) $675 per setup
B) $225 per setup
C) $450 per setup
D) $800 per setup
E) $2,025