Determine the labor costs required to manufacture the 100th item if the first item requires 50...

Determine the labor costs required to manufacture the 100^th item if the first item requires 50 days to produce and the learning curve is 82%. The manufacturing process requires two 9-hour shifts working each day, with 8 employees per shift. The employees are paid $17.50 per hour.

Solutions

Expert Solution

Solution :-

As per Learning Curve theory

Y = ax^b

Where a is time required for 1st unit = 50 * 9 * 2 = 900

X is Number of Units Produced

b is learning coefficient

Value of b = Log ( 0.82 ) / Log ( 2 ) = - 0.086186 / 0.30103 = - 0.2863

Now Cummulative hours required for 99 Units =

Y = ( 900 ) ( 99 )^-0.2863

Y = 900 * 0.268318 = 241.486 hours

Therefore time required for 99 Units = 99 * 241.486 = 23907.114 Hours

Now Cummulative hours required for 100 Units =

Y = ( 900 ) (100 )^-0.2863

Y = 900 * 0.267547 = 240.792 hours

Therefore time required for 100Units =100 * 240.792 = 24079.225 hours

Therefore time Required for 100 th Units = 24079.225 hours - 23907.114 Hours = 172.11 hours

Labor cost for 1 hour per employee = $17.50

Now Labor Cost for one unit that is of 8 workers per unit for 172.11 hours = 172.11 * 17.50 * 8 = $24,095.54

If there is any doubt please ask in comments

Thank you please rate ....

Rahul Sunny answered 5 months ago

Next > < Previous

Related Solutions

It is estimated that labor costs are between 50 - 75% of the costs of a...

It is estimated that labor costs are between 50 - 75% of the costs of a business. On December 1, 2016, a new labor law was supposed to take effect that would have likely made millions of salaried workers eligible for overtime pay. Certain salaried workers who earn below $47,476 would have been entitled to time-and-a-half wages for each hour they work beyond 40 hours a week. Currently salaried workers $23,660 and above earn no overtime pay even though many...

You are about to undertake the manufacture of a labor-intensive electronics component. The first unit took...

You are about to undertake the manufacture of a labor-intensive electronics component. The first unit took 300 hours. You are not sure whether the learning curve is 70% or 80%. The initial phase of the contract calls for 6 of these components. a. How much time will it take to complete all six at 70% learning? b. How much time will it take to complete all six at 80% learning?

This problem requires you to use a heap to store items, but instead of using a key of an item to determine where to store the item in the heap

This problem requires you to use a heap to store items, but instead of using a key of an item to determine where to store the item in the heap, you need to assign a priority (key) to each item that will determine where it is inserted in the heap 7a) Show how to assign priorities to items to implement a first-in, first-out queue with a heap. 7b) Show how to assign priorities to items to implement a first-in, last-out stack with...

Organizations determine standard costs for labor, materials, and overhead. Discuss variances for labor, materials, and overhead....

Organizations determine standard costs for labor, materials, and overhead. Discuss variances for labor, materials, and overhead. How do these variances differ from the standard costs? How is each computed? Why is calculating variances useful to an organization? Please help answer: How do these variances differ from the standard costs?

Organizations determine standard costs for labor, materials, and overhead. Discuss variances for labor, materials, and overhead....

The time and cost required to manufacture its product R&D costs were $120,000. The process was...

The time and cost required to manufacture its product R&D costs were $120,000. The process was patented. On July 1, 2016. Legal costs and fees to require the patent totaled $12,500. Browen estimated the useful life of the patent at 10 years. On July 1,2018, Browen sold the nonexclusive right to use the new process to Kennedy Company for $90,000. Because Bowen retained the patent, the agreement allows Kennedy to use, but not sell, the new technology for a period...

An assembly operation at a software company currently requires $96,000 per year in labor costs. A...

An assembly operation at a software company currently requires $96,000 per year in labor costs. A robot can be purchased and installed to automate this operation, and the robot will cost $192,000 with no MV at the end of its 10-year life. The robot, if acquired, will be depreciated using SL depreciation to a terminal BV of zero after 10 years. Maintenance and operation expenses of the robot are estimated to be $70,000per year. The company has an effective income...

If 200 labor hours were required to produce the first unit in a production run and...

If 200 labor hours were required to produce the first unit in a production run and 80 labor hours were required to produce the 6 unit, what was the learning curve rate during production?

Lala Corporation manufactures frames. It costs $200 to manufacture each picture frame, $50 to market each...

Lala Corporation manufactures frames. It costs $200 to manufacture each picture frame, $50 to market each picture frame, and $30 to ship each picture frame to customers. Research and developments costs are allocated at $40 per unit. Lala Corporation plans to use cost-plus pricing. Calculate the prospective selling price: if Lala Corporation marks up the manufacturing cost of the picture frames by 60% and if Lala Corporation marks up the full cost of the picture frames by 10%. Show your...

Listed below are costs found in various organizations. Required: For each cost item, indicate whether it...

Listed below are costs found in various organizations. Required: For each cost item, indicate whether it would be variable or fixed with respect to the number of units produced and sold; and then whether it would be a selling cost, an administrative cost, or a manufacturing cost. If it is a manufacturing cost, indicate whether it is a direct cost or an indirect cost with respect to units of product. Manufacturing Cost Cost Item Variable or Fixed Selling Cost Admin....

Subjects