Kaplan Kit question 163.
The time taken to produce the first batch of 50 units was 400 hours but the budgeted labour budget is subject to a learning effect where the learning rate is 90%. The rate of pay for labor is $12 per hour.
The business had received and satisfied an order for 600 units but it has now received a second order for anoher 800 units.
The value for b is = -0.152
What will be the labour cost for the second order? ( to the nearest $)
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2y ago#1The lab cost for the second order of 800 units
No batches
600 u/ 50 u pb = 12 b
800 u/50 u pb = 16 b
That makes a total of 28
Then calc total time for the first 12 batches
400 times 12^{-0.152}
400 times 0.6854
= 274.17285 hours per batch-so total time for 12 bat
274.17285 times 12 = 3,290.07 hrs
Then calc the total time for the first 28 batches
400 times 28^{-0.152}
400 times 0.6026
= 241.04158 hours per batch,
so again the time for 28 batches is 241.04158 times 28 = 6,749.16 hours
Calculate the time for the second order 6,749.16 - 3,290.07 = 3,459.09 hours
and the second order 3,459.09 times 12 = 41,509.08
So the lab cost for the second order is $41,509.
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