Figure 3-9
Hereford 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.
-Refer to Figure 3-9. What is the cumulative total time using the incremental unit-time learning curve to produce 2,000 units?

Question

Quizplus · Accepted Answer

The cumulative total time for 2,000 units using an 80% learning curve is calculated by multiplying the initial time (100 hours) by the cumulative average time factor for 2 batches (0.9), resulting in 180 hours.

Figure 3-9 Hereford Company Is Planning to Introduce a New Product with Product