A company can produce a small lot of products the first time at a cost of $10,000. If their 75 percent learning curve allows them to reduce their costs on each lot, what is the total cost of producing 10 lots?
A) $100,000
B) $93,978
C) $65,432
D) $55,890
E) $49,310

Question

Quizplus · Accepted Answer

The 75% learning curve means each time the production quantity doubles, the cost per lot is reduced to 75% of the previous cost. Using the learning curve formula, the total cost of producing 10 lots is calculated to be approximately $55,890.

A Company Can Produce a Small Lot of Products the First