Life cycle costing including learning curve

This question incorporates a labour learning curve in life cycle costing. While the calculation of the life cycle product cost was straightforward, it then asked for a re-calculation of unit costs taking into account a learning curve of 95%.

This is taken from the question:
“After preparing the cost estimates above, the company realises that it has not taken into
account the effect of the learning curve on the production process. The variable manufacturing cost per unit above, of $40 in year 2 and $42 in year 3, includes a cost for 0·5 hours of labour. The remainder of the variable manufacturing cost is not driven by labour hours. The year 2 cost per hour for labour is $24 and the year 3 cost is $26 per hour. Subsequently, it has now been estimated that, although the first unit is expected to take 0·5 hours, a learning curve of 95% is expected to occur until the 100th unit has been completed.”

I had no problem to calculate the time taken in year 2 and finding the labour cost. However when I came to calculate labour cost of year 3, I used the same labour cost per hour of year 2 – $24, since I assumed that the labour cost needed to reflect the learning curve.

The answer in the book keeps the labour cost for year 3 at $26.

Which part of my reasoning in incorrect?

Thanks.

P.S. not sure if I have posted this already, but my computer decided not to cooperate at the time 🙂