The Direct Labour Time Required to Produce the First Sailboat

question 125

Multiple Choice

The direct labour time required to produce the first sailboat of a particular model was 3000 hours. If the company believes that an 80% learning curve applies to the production of this model sailboat then the direct labour time required to produce the 2^nd boat is estimated to be

• A) 600 hours.
• B) 2,400 hours.
• C) 3,600 hours.
• D) 4,000 hours.

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Definitions:

Comprehensive Income

The change in equity of a company during a period from transactions and other events, including all non-owner changes.

Sales

The total revenue a company generates from selling goods or services within a specific period.

Cost of Goods Sold

The immediate expenses linked to the manufacturing of products sold by a business, covering both material and labor costs.