The Direct Labor Hours Required to Produce the First Two

question 36

Multiple Choice

The direct labor hours required to produce the first two units of a new product are 2,000 and 1,800,respectively.Using a 90% learning rate the company would estimate the direct labor hours for the 5th unit to be

• A)1692.4 hours.
• B)1620.0 hours.
• C)1566.0 hours.
• D)1523.2 hours.

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Definitions:

Balanced Scorecard

A strategic planning and management system used by organizations to align business activities to the vision and strategy, improve internal and external communications, and monitor organization performance against strategic goals.

Financial Measures

Metrics used to evaluate a company's financial health and performance, including profitability, liquidity, and leverage ratios.

Residual Income

Represents the net income that an organization or division generates beyond its required minimum rate of return, highlighting a surplus of financial performance.

Responsibility Accounting

A system of accountability in which managers are held responsible for those items of revenue and cost—and only those items—over which they can exert significant control. The managers are held responsible for differences between budgeted and actual results.