company can produce a small lot of products the first time at a cost of $3,000.If their 65 percent learning curve allows them to reduce their costs on each lot,what is the cost of producing the 12^th lot? A)$14,340 B)$3,000 C)$2,896 D)$640.50 E)$213.50

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Quizplus · Accepted Answer

The learning curve effect implies that each time production doubles, the cost per unit decreases by a certain percentage. For a 65% learning curve, the cost of the 12th lot can be calculated using the formula: Cost of nth unit = Initial cost * (n^log(learning rate)/log(2)). For the 12th lot, this results in approximately $640.50.

Company Can Produce a Small Lot of Products the First