Andrews & Henderson Inc.is a manufacturer of mining equipment in Colorado.Eric Andrews,the founder of the corporation,has just won a new contract from Shakley Inc.to build seven new tunneling machines for a price of $500,000 each.The machines are to be delivered in the next seven months.The costs associated with the production of the first machine are listed below.Eric estimates that an 85% cumulative average learning rate exists for these types of projects.Following is the cost information for the first tunneling machine:

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The Answer of Andrews & Henderson Inc.is a manufacturer of mining equipment in Colorado.Eric Andrews,the founder of the corporation,has just won a new contract from Shakley Inc.to build seven new tunneling machines for a price of $500,000 each.The machines are to be delivered in the next seven months.The costs associated with the production of the first machine are listed below.Eric estimates that an 85% cumulative average learning rate exists for these types of projects.Following is the cost information for the first tunneling machine: