ANSWER QUESTION 1 AND 2. SHOW YOUR WORK!

Question 1: ( Individual Contribution in team discussion area - What would be the total price ABC should pay for the 350 units for an 80% learning curve for labor, for a 90% learning curve, and for a 9 5 % learning curve for labor? What % difference is this between the two assumptions of learning curves?

Question 2: (Individual Contribution in team discussion area - What suggestions should ABC make to the supplier in order for the supplier to incur cost reductions at the 80% learning curve level?

$2,000 Average cost of 100 ($800 ea) 1,000 800 Average cost of original 50 ($1,000 ea) 600 400 300 200 Average cost of 400 ($510 ea) 4100 10 20 30 40 50 60 80100 200 300 500 800 1,000 Units produced Figure 14.6I Estimating Labor Cost for the New Contract The ABC Corporation has purchased 50 pieces of a specially designed electronic component at $2,000 per unit. In the $2,000 selling price, $1,000 represents direct labor. An audit of product costs for the first 50 units established that the operation is subject to an 80 percent cumulative average learning curve. What