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Please help me question 39.3
Normally, I familiar with the exercise with only one learning rate. But this question here, there are 3 learning rate. I do not know how to do this question.
Thanks.I have one more question. Please help me, sir.
Q 39.4
I do not know which part is it concerned about? Can you give me some idea to solve this question.
Thanks.39.3
If you are referring to the formula on the formula sheet, then you cannot use it here because the learning rate changes.
You should use the doubling rule – every time we double production then the average time falls to a fixed percentage (the learning rate) of the previous average time.If you are still confused, then you should watch the free lecture on learning curves.
39.4
This is asking you to flex the budget.
Materials varies with production – the cost per unit stays the same.
Labour: the cost per unit changes, so it is part fixed and part variable. You need to use the high-low method.
Production overheads: the same as labour. You need the high low method (and to save time you could do labour and production overheads together).
Admin costs: there are fixed and so will stay at 35.
Selling and distribution: again you will need high/low method (and the variable part will vary with the sales)
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