A Furniture Manufacturer Has an Order for 20 Custom Wine

question 21

Essay

A furniture manufacturer has an order for 20 custom wine cabinets for a large hotel in Hawaii. It is estimated that the first cabinet will take 100 hours of shop time. An 85 percent learning curve is expected. The labor rate is $12.00 per hour. The pricing policy is to charge two times the labor cost for the order.
a. How many hours will the 20th wine cabinet take?
b. How many hours should the whole order take?
c. What is the price of each cabinet?

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