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- This topic has 1 reply, 2 voices, and was last updated 8 years ago by John Moffat.
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- May 29, 2015 at 12:00 pm #250183
During the following year, a 90% learning curve was observed in making a product. The cumulative production at the end of the third quarter was 50 units. After producing 50 units, the learning effect ended, and all subsequent units took the same time to make.
Required: What is the standard cost per unit for the fourth quarter assuming the learning curve had reached a steady state ie peak efficiency was reached after the 50th unit was produced?
In the answer, it compared 51 units with 50 units. Why it is not by comparing 50 units with 49 units, if the learning curve stopped at 50? By applying the Y-axb for 51 units, aren’t you applying the learning curve also in the 51st unit, thus the learning curve is stopped in 51 instead of 50 units as told?
Thank you in advance John.
regards,
Marylise
May 29, 2015 at 12:30 pm #250199On what you have written, you are correct – they should subtract the total time for 49 units from the total time for 50 units.
(Without seeing the actual question and the actual answer, I am obviously assuming that you have read them correctly 🙂 )
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