Question

create specialized portraits. a new employee takes 8 hours to make the first portrait and 6 housr to make the second. how much manufacturing overhead wold be charged to 16 portraits using the cumulative average approach

Answer 1

Question Completion:

The manufacturing overhead charge per hour is $24.

Answer:

The manufacturing overhead that would be charged to 16 portraits using the cumulative average approach is:

$336.

Explanation:

a) Data and Calculations:

Time taken by new employee to make the first portrait = 8 hours

Time taken by employee to make the second portrait = 6 hours

Unit    Hours   Cumulative Hours  Cumulative Average

1.           8.0                  8.0                   8.0

2.          6.0                 14.0                  7.0

Learning curve percentage = cumulative average/ hours for 1st unit = 7/8 hour * 100) = 0.875

This means that every unit produced, the time used reduces by 12.5% (1 - 0.875)

Therefore, the time to produce 16 units = 16 * 0.875 = 14 hours

Manufacturing overhead = 14 * $24 = $336