Answer:
A. $1,926,900
B. $2,318,400
Explanation:
(a) Calculation for What would this bid be
TOTAL LABOR COST
First step is to calculate the LR for Total labor cost
LR = 3500/5000
LR = 70%
Second step is to calculate the cumulative factor using cumulative table
12 units cumulative factor frelated to labor
=5.501
2 units cumulative factor frelated to labor = 1.700
Hence,
Cumulative factor = 5.501 – 1.700
Cumulative factor = 3.801
Third step is to calculate the Labor cost for 10 more units
Labor cost for 10 more units = 5,000(3.801)(30)
Labor cost for 10 more units = $570,150
MATERIAL
First step is to calculate the LR for Material:
LR = 200000/250000
LR= 80%
Second step is to calculate Cumulative factor
12 Units cumulative factor in case of material = 7.227
2 units cumulative factor in case of material = 1.800
Hence,
Cumulative factor = 7.227 – 1.800
Cumulative factor = 5.427
Third step is to calculate Total cost fo material for additional 10 units
Total cost fo material for additional 10 units = 250,000(5.427)
Total cost fo material for additional 10 units= $1,356,750
Now let calculate What would this bid be
Total cost = $570,150 + $1,356,750
Total cost = $1,926,900
Therefore the bid will be for $1,926,900
b. Calculation for What would be the total production costs for the additional 10 units
First step is to calculate Labor cost
Labor cost Cumulative factor using Cumulative tables =4.931
Labor cost = 4.931*(5,000)*(30)
Labor cost =$739,650
Second step is to calculate the material cost
material cost Cumulative factor using cumulative table 6.315
Material cost = 6.315*($250,000)
Material cost=$1,578,750
Now let calculate the Total cost
Total cost=$739,650+$1,578,750
Total cost= $2,318,400
Therefore What would be the total production costs for the additional 10 units is $2,318,400
