Atman Enterprises assembles satellites using customer supplied parts and materials. A customer has asked Atman to bid on a new model of satellites and estimates purchasing eight units. Atman believes that it would take 20,000 hours to assemble the first satellite. Atman’s labor cost is $25 per labor hour.

Required:
a. Determine the total number of hours required to assemble all eight satellites, assuming no learning takes place. What is the associated labor cost?
b. Repeat requirement (a) assuming that Atman expects to realize a 90% learning curve for such jobs.
c. Comparing your answers for parts (a) and (b), what conclusions do you draw about the importance of including the effects of learning when bidding for jobs?