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LEARNING CURVE MCQ

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › LEARNING CURVE MCQ

  • This topic has 1 reply, 2 voices, and was last updated 9 years ago by John Moffat.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • August 12, 2016 at 1:44 pm #332852
    ahmed9729
    Member
    • Topics: 66
    • Replies: 60
    • ☆☆

    BB plc has received an order to make eight units of a new product called the Betty Boop.
    The time to produce the first unit is estimated to be 100 hours, and a 80% learning curve is
    expected. The rate of pay is $6 for each hour.
    The direct materials for each unit is $2,500 and the fixed costs associated with the order are
    $9,600.

    What is the average cost of each unit (to the nearest $) for this order of product Betty
    Boop?
    A $4,007
    B $4,180
    C $6,158
    D $10,160

    I know it looks like an easy question but I seem to get the wrong answer I dont know why
    Please help

    August 12, 2016 at 4:46 pm #332877
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54835
    • ☆☆☆☆☆

    The average time per unit = 100 x 0.80^3 = 51.2 hours.

    Therefore the average labour cost = 51.2 x 6 = 307.20
    The fixed costs per unit = 9,600/8 = 1,200

    So the total cost per unit = 307.20 + 2,500 + 1,200 = 4,007.20

  • Author
    Posts
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