Learning Curves (Appendix 1). Western Space Systems, Inc. is developing a new but complex part for a sophisticated Star Wars missile. In making the first unit, the company used 500 direct labor hours at a cost of \(\$ 8,000\). The Engineering Department is estimating a learning curve but hasn't decided whether it is 80 percent or 90 percent.

\section*{Required:}

1. Determine the cumulative average work hours per unit under an 80 percent and a 90 percent learning curve for a total of:

(a) 2 units.

(b) 4 units.

(c) 8 units.

(d) 16 units.

2. After completing the first unit, a prime contractor has ordered 15 additional units. What is the estimated direct labor cost for this order:

(a) for an 80 percent learning curve?

(b) for a 90 percent learning curve?

3. Suppose the actual learning curve realized in producing the additional 15 units was 85 percent, what is the additional cost or savings on the order as compared to an 80 percent and a 90 percent learning curve?