Answer to Question #66516 in Other for cyraaah

Question

Dench has received a special order from Sands to produce 225 components to be incorporated into Sand's product It produces the components in batches of 15 and as the ones required are to be custom made to Sands' specifications a 'prototype' batch was manufactured
Materials $
4kg of A $ 7.50/kg 30
2kg of B $ 15kg 30
Labour
20 hrs skilled $ 15/hr 300
5 hrs semi-skilled $8/hr 40

Variable overhead
25 labour hours $ 4/hr 100 500



Dench's plans to exclude the prototype batch from Sands order Management believes a 80% learning rate effect is experienced in this process and would like a cost estimate for the 225 components prepared on that basis
Prepare the cost estimate assuming an 80% learning rate is experienced