Assume the same information for Global Defense as in Exercise 10-29, except that Global Defense uses an 85% incremental unit-time learning model as a basis for predicting direct manufacturing labor-hours. (An 85% learning curve means b = 0.234465.)

Required
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?

Data From Exercise 10-29:

Global Defense manufactures radar systems. It has just completed the manufacture of its first newly designed system, RS-32. Manufacturing data for the RS-32 follow:

                                

Required
Calculate the total variable costs of producing 2, 4, and 8 units.