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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › PM – Kaplan question 246.4 – Target costing
Hello. Could you please explain me the solution of this question?
What is an impact of the change in the learning rate? Why it increases current estimated cost?
Thank you in advance
Sorry for the delay, mix-up, and any confusion!
The higher the learning rate, the slower the learning is (if the learning rate was 100% then it would mean they were not ever getting any faster).
So with a higher learning rate, the time per unit will be higher and therefore the cost per unit will be higher. This will mean a higher cost gap.