Acme,Inc,Produces Widgets

question 83

Multiple Choice

Acme,Inc.,produces widgets.To manufacture a new type of widget,it took 68 hours for the first widget.Acme estimates it has a 91% learning rate.Using the logarithmic approach,calculate the time it will take to manufacture the 109th widget.

• A)36.24 hours
• B)34.86 hours
• C)39.52 hours
• D)35.90 hours

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Definitions:

Forecasting Error

The difference between the actual outcome and the predicted value in a forecast.

Operating Leverage

A measure of how revenue growth translates into growth in operating income, indicating a company's fixed versus variable costs.

Variable Costs

Expenses that change in proportion to the level of production or sales, such as raw materials and labor costs.

Operating Leverage

Operating leverage describes the extent to which a company can increase profits by increasing sales, indicating the proportion of fixed costs to variable costs.