Figure 3-9 Abboud Company is planning to introduce a new product with an 80 percent learning rate for production for batches of 1,000 units.The variable labor costs are $30 per unit for the first 1,000-unit batch.Each batch requires 100 hours.There are $10,000 in fixed costs not subject to learning.
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Refer to Figure 3-9.What is the cumulative total time using the incremental unit-time learning curve to produce 2,000 units?
A) 100
B) 180
C) 90
D) 80

Question

Quizplus · Accepted Answer

The cumulative total time for 2,000 units with an 80% learning rate is calculated by multiplying the initial time (100 hours) by the cumulative average time factor for 2 batches (1.8), resulting in 180 hours.

Figure 3-9 Abboud Company Is Planning to Introduce a New