Cost estimation, incremental unit-time learning model. Assume the same information for the Nautilus Company as in Problem 10-36 with one exception. This exception is that Nautilus uses an 85% incremental unit-time learning model as a basis for predicting direct manufacturing labor–hours in its assembling operations. (An 85% learning curve means b = –0.234465.)

1. Prepare a prediction of the total costs for producing the seven PT1O9s for the Navy.

2. If you solved requirement 1 of Problem 10-36, compare your cost prediction there with the one you made here. Why are the predictions different? How should Nautilus decide which model it should use?