Learning curve, incremental unit-time learning model. Learning curve, incremental unit-time learning model, Assume the same information for Global Defense as in Exercise 10-29, except that Global Defense uses a 90% incremental unit-time learning mode as a basis for predicting direct manufacturing labor-hours. (A 90% learning curve means b = –0.152004.)

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

2. If you solved Exercise 10-29, compare your cost predictions in the two exercises for 2 and 4 units. Why are the predictions different? How should Global Defense decide which model it should use?