Sure Seed Company makes a lawn repair mixture that is sold in five-pound bags. One machine mixes the seed, soil, fertilizer, and special ingredients to make the lawn repair mix . The machine runs two shifts, or 4,000 hours per year. The committed costs of running the machine are $1,200,000 per year. Managed costs are $800,000 per year.

REQUIRED:

a. Calculate the managed cost per hour.

b. Calculate the committed cost per hour.

c. It takes two seconds to fill and seal one bag (its cycle time). Using competitive cost, what does it cost to make one bag of lawn repair mixture?