The First Unit of a Product Took 832 Hours to Build

question 107

Multiple Choice

The first unit of a product took 832 hours to build, and the learning curve is 70%. How long will it take to make the 10th unit? (Use at least three decimals in the exponent if you use the formula approach.)

• A) less than 250 hours
• B) from 251 to 275 hours
• C) from 276 to 300 hours
• D) from 301 to 325 hours
• E) 325 or more hours

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Definitions:

Direct Labor-Hours

A measure of the total hours worked by employees directly involved in manufacturing a product or providing a service.

Manufacturing Overhead

Manufacturing overhead encompasses all production costs other than direct materials and direct labor, including expenses like factory equipment maintenance and utilities.

Direct Materials

Materials that are directly used in the production of a product and can be physically and easily traced to it.

Step-Down Method

A method used in cost accounting that allocates support department costs to producing departments in a sequential process, where each department's costs are allocated to other departments based on a predetermined order.