Question

Jolsan Technologies had received a contract to produce two units of a new cruise missile guidance control. The first unit took 5,000 hours to complete and cost $30,000 in materials and equipment usage. The second took 4,500 hours and cost $24,000 in materials and equipment usage. Labor cost is charged at $20 per hour. The prime contractor has now approached Jolsan Technologies and asked to submit a bid for the cost of producing another 20 guidance controls. Use Exhibit 6.4 and Exhibit 6.5. What will the last unit cost to build

Answer 1

$73,600

Step-by-step explanation:

A learning curve is a correlation between a learner's performance on a task and the number of attempts or time required to complete the task; this can be represented as a direct proportion on a graph

The last unit will be 22nd unit .

Using learning curve table ,

Time required to build 22nd unit = 3125.49 hours

labour cost to build 22nd unit ( $20 per hour ) = $20 x $3125.49

labour cost to build 22nd unit = $62509.80

Using learning curve table ,

material and equipment cost to build 22nd unit = $11090.67

Therefore,

total cost to build the last unit = Labour cost + Material and equipment cost total cost to build the last unit = $62509.80 + $11090.67

total cost to build the last unit = $73600.47

Learning rate for labour hours ( L1) = Time for 2nd unit / Time for 1st unit

Learning rate for labour hours ( L1) = 4500/5000

Learning rate for labour hours ( L1) = 0.90

Learning rate for material and equipment usage

Learning rate for material and equipment usage = Material and equipment cost for 2nd item / Material and equipment cost for 1st item

Learning rate for material and equipment usage = 24000/30000

Learning rate for material and equipment usage = 0.80 or 80 %