Outdoor Adventure Industries is a U.S.-based manufacturer of sporting goods. It has recently decided to make a major push to sel
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Answer:
cumulative learning factor for 85% and 400 units = 127.6
cumulative learning factor for 90% and 400 units = 189.3
total labor costs for producing the next 350 units = labor cost for producing 400 units - labor cost for producing 50 units
85% learning curve:
total labor costs for producing 400 units = $1,000 x 127.6 = $127,600
total labor costs for producing 50 units = $1,000 x 50 = $50,000
total labor costs for producing the next 350 units = $127,600 - $50,000 = $77,600
labor cost per unit = $77,600 / 350 = $221.71
90% learning curve:
total labor costs for producing 400 units = $1,000 x 189.3 = $189,300
total labor costs for producing 50 units = $1,000 x 50 = $50,000
total labor costs for producing the next 350 units = $189,300 - $50,000 = $139,300
labor cost per unit = $139,300 / 350 = $398
