Conversion Factors for the Cumulative Average Number of Direct Labor

question 32

Multiple Choice

Conversion Factors for the Cumulative Average Number of Direct Labor Hours per Unit
$\begin{array}{c}\begin{array}{c}80 \% \text { Learning Rate }\\\text { ( } n=\text { cumulative production) }\\\begin{array}{rrrrrr}\hline n & & n & & {n} & \\\hline 1 & 1.00000 & 19 & 0.53718 & 37 & 0.43976 \\2 & 0.90000 & 20 & 0.52425 & 38 & 0.43634 \\3 & 0.83403 & 21 & 0.51715 & 39 & 0.43304 \\4 & 0.78553 & 22 & 0.51045 & 40 & 0.42984 \\5 & 0.74755 & 23 & 0.50410 & 64 & 0.37382 \\6 & 0.71657 & 24 & 0.49808 & 128 & 0.30269 \\7 & 0.69056 & 25 & 0.49234 & 256 & 0.24405 \\8 & 0.66824 & 26 & 0.48688 & 512 & 0.19622 \\9 & 0.64876 & 27 & 0.48167 & 600 & 0.18661 \\10 & 0.63154 & 28 & 0.47668 & 700 & 0.17771 \\11 & 0.61613 & 29 & 0.47191 & 800 & 0.17034 \\12 & 0.60224 & 30 & 0.46733 & 900 & 0.16408 \\13 & 0.58960 & 31 & 0.46293 & 1,000 & 0.15867 \\14 & 0.57802 & 32 & 0.45871 & 1,200 & 0.14972 \\15 & 0.56737 & 33 & 0.46464 & 1,400 & 0.14254 \\16 & 0.55751 & 34 & 0.45072 & 1,600 & 0.13660 \\17 & 0.54834 & 35 & 0.44694 & 1,800 & 0.13155\\18& 0.53979 & 36 & 0.44329 & 2,000 & 0.12720\end{array}\end{array}\begin{array}{cl}90 \% \text { Learning Rate }\\\text { ( } n=\text { cumulative production) }\\\begin{array}{rrrrrr}\hline n &&{n} & &n & \\\hline 1 & 1.00000 & 19 & 0.73545 & 37 & 0.67091 \\2 & 0.95000 & 20 & 0.73039 & 38 & 0.66839 \\3 & 0.91540 & 21 & 0.72559 & 39 & 0.66595 \\4 & 0.88905 & 22 & 0.72102 & 40 & 0.66357 \\5 & 0.86784 & 23 & 0.71666 & 64 & 0.62043 \\6 & 0.85013 & 24 & 0.71251 & 128 & 0.56069 \\7 & 0.83496 & 25 & 0.70853 & 256 & 0.50586 \\8 & 0.82172 & 26 & 0.70472 & 512 & 0.45594 \\9 & 0.80998 & 27 & 0.70106 & 600 & 0.44519 \\10 & 0.79945 & 28 & 0.69754 & 700 & 0.43496 \\11 & 0.78991 & 29 & 0.69416 & 800 & 0.42629 \\12 & 0.78120 & 30 & 0.69090 & 900 & 0.41878 \\13 & 0.77320 & 31 & 0.68775 & 1,000 & 0.41217 \\14 & 0.76580 & 32 & 0.67471 & 1,200 & 0.40097 \\15 & 0.75891 & 33 & 0.68177 & 1,400 & 0.39173 \\16 & 0.75249 & 34 & 0.67893 & 1,600 & 0.38390 \\17 & 0.74646 & 35 & 0.67617 & 1,800 & 0.37711 \\18 & 0.74080 & 36 & 0.67350 & 2,000 & 0.37114\end{array}\end{array}\end{array}$

-The fifth unit of a long production run was produced in 15 hours.The process has an estimated learning rate of 90 percent.What is the lowest level of output at which the average production time per unit falls below 15 hours? Refer to the copy of Table G.1 above.

• A) Fewer than or equal to 8 units
• B) Greater than 8 units but fewer than or equal to 11 units
• C) Greater than 11 units but fewer than or equal to 14 units
• D) Greater than 14 units

---

Definitions:

Total Equity

The total of all stockholder's equity (both preferred and common stock) plus retained earnings within a company.

Average Collection Period

A financial metric indicating the average number of days it takes for a firm to receive payments owed by its customers.

Net Sales

The total revenue from goods and services sold by a business, minus returns, allowances for damaged or missing goods, and discounts.

Average Receivables

Represents the average amount of money owed to a company from its customers over a specific period, indicating its efficiency in collecting funds.