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The question said that learning curve effect apply for the first 100 units, which means manufacture time for 101st unit must equal to 100th unit (no more leaning curve effect for 101st). Hence, the steady rate starts on the 100th unit.

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@laurra said:
Well, I would think it was “the learning curve applied to the first 100 units of year 2” because learning curve occurs only once. You wouldn’t learn to do something twice. So all in all after 100th unit was produced the steady state was reached and then rest of units, i.e. all 299,900 of them were being produced at steady pace.

I remember calculating ‘cumulative average for 100 units x 100’ and ‘cumulative average for 101 units x 101’. Subtract one from another and get the time for steady state which I then applied for the remainder of units, i.e. 299,900 units.

I think the right method should be
calculating ‘cumulative average for 100 units x 100? and ‘cumulative average for 99 units x 99?. Subtract one from another and get the time for steady state which I then applied for the remainder of units, i.e. 299,900 units.

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@polldoll said:
The learning curve only applied for the first 100 units. I assumed the company had given their staff a pay rise at the beginning of year 2 so that’s why it was budgeted to cost more. I multiplied my cost per unit for 100th and so on units by 26/24 to get the cost per unit for year 2.

I agree with you, the learning curve only applied for the first 100 units of year 2
My answer is 82.3 and 78

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@october1978 said:
Hi, got 82.3 & 78.9 I think, so happy looking at your answers (:

How could your answer be 78.9 instead of 78 ?
Did you apply the learning curve for the first 100 units of both year 2 and 3 or only year 2 ?

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thank you guys.
I’m very happy with my correct answers
82.3 and 78

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My friend’s answer for the revised cost is 78.9
I am not sure whether the correct answer is 78 or 78.9. May be the difference is due to rounding problem of calculation

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