Mundy Missiles Corp. is negotiating with the government for the production of cruise missiles. The government is considering purchasing either eight missiles for $2,500,000 or sixteen missiles for $5,000,000. Mundy requires a margin of 30 percent to cover administrative costs, research and development, and to make a profit. Mundy has started a chart for this product assuming the production costs are subject to an 80 percent cumulative learning curve.
83.
1) Complete the chart (items a - f) by filling in the cost amounts for volumes 4, 8, and 16 units.
2) Should Mundy sell eight units? Sixteen units?

Question

Mundy Missiles Corp. is negotiating with the government for the production of cruise missiles. The government is considering purchasing either eight missiles for $2,500,000 or sixteen missiles for $5,000,000. Mundy requires a margin of 30 percent to cover administrative costs, research and development, and to make a profit. Mundy has started a chart for this product assuming the production costs are subject to an 80 percent cumulative learning curve.
  83.
1) Complete the chart (items a - f) by filling in the cost amounts for volumes 4, 8, and 16 units.
2) Should Mundy sell eight units? Sixteen units?

Quizplus · Accepted Answer

The Answer of Mundy Missiles Corp. is negotiating with the government for the production of cruise missiles. The government is considering purchasing either eight missiles for $2,500,000 or sixteen missiles for $5,000,000. Mundy requires a margin of 30 percent to cover administrative costs, research and development, and to make a profit. Mundy has started a chart for this product assuming the production costs are subject to an 80 percent cumulative learning curve.
  83.
1) Complete the chart (items a - f) by filling in the cost amounts for volumes 4, 8, and 16 units.
2) Should Mundy sell eight units? Sixteen units?