June2017SupportPackage.pdf

# Type degree of average hours per learning curve unit

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Type (Degree) of Average Hours Per Learning Curve Unit for Units 201-400 a. 20% 10.24. b. 80% 10.24. c. 80% 7.68. d. 20% 3.84.

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20 57. CSO: 1B3b LOS: 1B3e Propeller Inc. plans to manufacture a newly designed high-technology propeller for airplanes. Propeller forecasts that as workers gain experience, they will need less time to complete the job. Based on prior experience, Propeller estimates a 70% cumulative learning curve and has projected the following costs. Cumulative number Manufacturing Projections of units produced Average cost per unit Total costs 1 \$20,000 \$20,000 2 14,000 28,000 If Propeller produces eight units, the average manufacturing cost per unit will be a. \$1,647. b. \$6,860. c. \$9,800. d. \$14,000. 58. CSO: 1B3b LOS: 1B3e In competing as a subcontractor on a military contract, Aerosub Inc. has developed a new product for spacecraft that includes the manufacturing of a complex part. Management believes there is a good opportunity for its technical force to learn and improve as they become accustomed to the production process. Accordingly, management estimates an 80% learning curve would apply to this unit. The overall contract will call for supplying eight units. Production of the first unit requires 10,000 direct labor hours. The estimated total direct labor hours required to produce the seven additional units would be a. 30,960 hours. b. 40,960 hours. c. 56,000 hours. d. 70,000 hours. 59. CSO: 1B3b LOS: 1B3e A manufacturing company required 800 direct labor hours to produce the first lot of four units of a new motor. Management believes that a 90% learning curve will be experienced over the next four lots of production. How many direct labor hours will be required to manufacture the next 12 units? a. 1,792. b. 1,944. c. 2,016. d. 2,160.
21 60. CSO: 1B3b LOS: 1B3e Propeller Inc. plans to manufacture a newly designed high-technology propeller for airplanes. Propeller forecasts that as workers gain experience, they will need less time to complete the job. Based on prior experience, Propeller estimates a 70% cumulative learning curve and has projected the following costs. Cumulative number Manufacturing Projections of units produced Average cost per unit Total costs 1 \$20,000 \$20,000 2 14,000 28,000 The estimated cost of an order for seven additional propellers, after completing production of the first propeller, would be a. \$34,880. b. \$54,880. c. \$92,000. d. \$98,000. 61. CSO: 1B3c LOS: 1B3g Johnson Software has developed a new software package. Johnson’s sales manager has prepared the following probability distribution describing the relative likelihood of monthly sales levels and relative income (loss) for the company’s new software package. Monthly Sales In Units Probability Income (Loss) 10,000 .2 \$(4,000) 20,000 .3 10,000 30,000 .3 30,000 40,000 .2 60,000 If Johnson decides to market its new software package, the expected value of additional monthly income will be a. \$23,200. b. \$24,000. c. \$24,800. d. \$25,000.1B4a

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