Assume the same information for Genve Dfense Systmes as in Exercise 9.17 except that Genve Dfense Systmes

Assume the same information for Genève Défense Systèmes as in Exercise 9.17 except that Genève Défense Systèmes uses a 90% incremental unit-time learning curve as a basis for forecasting direct manufacturing labour-hours. (A 90% learning curve implies q = -0.1520.)

Required

1 Calculate the total variable costs of producing 2, 3 and 4 units.

2 If you solved Exercise 9.17, compare your cost predictions in the two exercises for 2 and 4 units. Why are the predictions different?