The direct labor time required to produce the first sailboat of a particular model was 3,000 hours.If the company believes that an 80% learning curve applies to the production of this model sailboat,then the direct labor time required to produce the second boat is estimated to be
A)600 hours.
B)2,400 hours.
C)3,600 hours.
D)4,000 hours.

Question

Quizplus · Accepted Answer

An 80% learning curve means that each time the quantity produced doubles, the labor hours required will decrease by 20%. Since the second sailboat being produced is the second unit, we can use the learning curve to estimate the direct labor time required:

2nd boat = 3,000 hours x 0.80 = 2,400 hours

The Direct Labor Time Required to Produce the First Sailboat