learncing curve

Bokco is a manufacturing company. It has a small permanent workforce but it is also reliant on temporary workers, whom it hires on three-month contracts whenever production requirements increase. All buying of materials is the
responsibility of the company’s purchasing department and the company’s policy is to hold low levels of raw materials in order to minimise inventory holding costs. Bokco uses cost plus pricing to set the selling prices for its products once
an initial cost card has been drawn up. Prices are then reviewed on a quarterly basis. Detailed variance reports are produced each month for sales, material costs and labour costs. Departmental managers are then paid a monthly
bonus depending on the performance of their department.
One month ago, Bokco began production of a new product. The standard cost card for one unit was drawn up to include a cost of $84 for labour, based on seven hours of labour at $12 per hour. Actual output of the product during
the first month of production was 460 units and the actual time taken to manufacture the product totalled 1,860 hours at a total cost of $26,040.
After being presented with some initial variance calculations, the production manager has realised that the standard
time per unit of seven hours was the time taken to produce the first unit and that a learning rate of 90% should have
been anticipated for the first 1,000 units of production. He has consequently been criticised by other departmental managers who have said that, ‘He has no idea of all the problems this has caused.’
Required:
(a) Calculate the labour efficiency planning variance and the labour efficiency operational variance AFTER taking
account of the learning effect.
Note: The learning index for a 90% learning curve is –0·1520

hi john, what i did was – time taken for the 460 units and subtracted with the time taken for 459 units. and then multpiplied it with 460 units but it is wrong and why is it wrong though?