Innova, SA

question 33

Essay

Innova, SA., is beginning the production of a new product. Management believes that 500 labour hours will be required to complete the new unit. An 80 percent incremental unit-time learning curve model for direct labour hours is assumed to be valid. Assume that the exponent b = -0.3219. Data on costs are as follows: Required:
a.
Set up a table with columns for cumulative number of units showing the cumulative total time in hours using the incremental unit-time learning curve. Complete the table for 1, 2, 3, and 4 units given the individual unit time for the nth unit as 500, 400, 351, and 320 for 1 to 4 units respectively.
b.
Set up a similar table assuming a 90 percent with the incremental unit-time learning curve with the individual unit time for the nth unit as 500, 450, 430, 405 for 1 to 4 units respectively.
c.
What is the difference in variable cost of producing four units?

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Definitions:

Teams

Groups of people working together towards a common goal.

Traverse

To move or travel across, through, or over a specific area or space.

Informal Groups

Naturally occurring groups within organizations or social settings, formed based on common interests, friendships, or identities, without formal structure.

Organizational Goals

The objectives or targets that an organization aims to achieve in a specific timeframe.