It says in the question that 50% of variable costs would be affected by a learning and experience curve and will apply to each batch produced. So why does the amount not affected by learning stay at $30,000? For not affected amount for 40,000 units I would have just did 50% of the variable cost again. Can someone please rephrase the text so it’s clearer?
50% of the cost of 10,000 units is subject to the learning curve effect, the other 50% is not.
What you are proposing would actually subject 100% of the cost to the learning curve effect
Best of luck for June!
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