The First Product Took 10 Hours to Build and the Learning

question 79

Multiple Choice

The first product took 10 hours to build and the learning curve is estimated to be 90%. How long will it take to make the eighth unit?

• A) 10 hours
• B) 9 hours
• C) 8.1 hours
• D) 7.29 hours
• E) none of these

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Definitions:

Applied Production

The practical application of manufacturing processes to produce goods or materials.

Fixed Overhead

Represents the regular, recurring costs associated with operating a business that do not vary with production volume, essentially an alternate term to Fixed Costs but specifically related to manufacturing overhead.

Budget Variance

The difference between the budgeted amounts of expense or revenue and the actual amounts incurred or earned.

Standard Cost

A predetermined cost of manufacturing a product or providing a service, used as a benchmark to measure actual performance against.