g jolsan Technologies had received a contract to produce two units of a new cruise missile guidance control. The first unit took 5,000 hours to complete and cost $30,000 in materials and equipment usage. The second took 4,500 hours and cost $24,000 in materials and equipment usage. Labor cost is charged at $25 per hour. The prime contractor has now approached Jolsan Technologies and asked to submit a bid for the cost of producing another 20 guidance controls. Use Exhibit 6.4 and Exhibit 6.5. What will the last unit cost to build

Respuesta :

Answer:

Total cost to build the last unit = $89,227.92

Explanation:

Focus on time required to build 22nd unit (2 new unit + 20 existing unit guidance control)

Learning rate for labour hours = Time for the second unit / Time for the first unit

Learning rate for labour hours = 4500 hours /5000 hours

Learning rate for labour hours = 0.90

Learning rate for material and equipment usage  = Material and equipment cost for the second item / Material and equipment cost for the first item

Learning rate for material and equipment usage  = $24.000 / $30,000

Learning rate for material and equipment usage  = 0.80

Using learning curve table, the time required to build 22nd unit = 3,125.49 hours. Using learning curve table, the material and equipment cost to build 22nd unit = $11,090.67

Labour cost to build 22nd unit at $25 per hour = $25 * $3125.49 = $78,137.25

Hence, the total cost to build the last unit = Labour cost + Material and equipment cost

Total cost to build the last unit = $78,137.25 + $11,090.67

Total cost to build the last unit = $89,227.92