HI
The labour cost per unit has been based on an expected learning rate of 95%, but HD Co’s operations director now believes that the actual learning rate is 90%.
so ANSWER is The cost gap will decrease and the target cost will remain the same ,
shouldnt the cost gap increase ,learn at a slower rate , take more hours to complete ? please explain
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March 24 ,MOCK exam
2y ago
2y ago#1I think with a learning rate of 90% instead of 95%, the cost gap will increase, and the target cost will remain unchanged.
The target cost is determined by the selling price and the desired profit margin, which are not directly affected by the learning rate.
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