Question

A company can produce a product the first time at a cost of $2,500. If its 85 percent learning curve allows the company to reduce its costs on each product, what is the total cost of producing 400 units of the new product? _________________

Answer 1

Answer:

319,000

Explanation:

Based on information identified from the complete source question, a table showing the 85% learning curve indicating that the first unit costs $1, and it shows that the cumulative cost to produce 400 units is $127.60.

So, in this situation where the first unit cost $2,500, logically we would expect the total cost for four hundred units to be $2,500 * 127.60 = $319,000