Cost analysis. show work please No labor actuals were captured for the first six
ID: 332903 • Letter: C
Question
Cost analysis. show work please
No labor actuals were captured for the first six units manufactured. It took 160 hours to manufacture the next batch of 8 units (units 7-14) During the next 6 months, an additional 60 units were built for which no labor data was collected.The next batch of 12 units (units 75-86) required 122 hours to produce During the next 6 months, an additional 100 units were produced for which no labor data was collected. It took 117 hours to produce the next batch of 15 units (units 187-201) Calculate the learning curve demonstrated by this organizationExplanation / Answer
As we know that learning curve is represented by the following formula-
Tn=T1 * n^b
where,
n = the unit number (1 for the first unit, 2 for the second unit, etc.)
T1 = the amount of time to produce the first unit
Tn = the amount of time to produce unit n
b = the learning curve factor, calculated as In (p)/ln(2), where ln(x) is the natural logarithm of x
p = the learning percentage
Now let us analyse the given data,
-time to produce 1st product is not given
- time to product t7 to t14 is 160 hours, i.e, 20 hours per product. Lets say that t10 = 20 hours
- Similarly t80 = 10.17 hours
-Similarly t195 = 7.8 hours
putting all the above values into the formula Tn=T1 * n^b-
20 = T1 * 10^b
10.17 = T1*80^b
Diving the above two equations-
20/10.17 = 10^b/80^b
Solving for b, we get b = -0.325227
Since b = ln(p)/ln(2)
therefore -0.325227 = ln(p)/ln2
Solving for p, we get learning percentage as 0.798 or 79.8%