Question

You are a consultant specializing in estimating the costs after the employees learn how to do a job more efficiently by repetition. Your client can produce a product the first time at a cost of $2,500. If their 65 percent learning curve allows them to reduce their costs on each product, what is the total cost of producing 400 units of the new product?

Answer 1

Answer:

$58,600

Explanation:

The computation of the total cost for producing the 400 units for the new product is shown below:

= Learning curve at 65% for producing 400 units × cost for produced first time

= 23.44 × $2,500

= $58,600

By multiplying the Learning curve at 65% for producing 400 units with the cost i.e produced first time so that the total cost could come and the same is to be considered