Johnson Industries received a contract to develop and produce four high-intensity long-distance receiver/transmitters for cellular telephones. The first took 2,200 labor hours and $40,000 worth of purchased and manufactured parts; the second took 1,450 labor hours and $30,400 in parts; the third took 1,190 labor hours and $26,450 in parts; and the fourth took 928 labor hours and $22,500 in parts. The company expects learning to occur relative to labor and also relative to the pricing of parts from suppliers.

Johnson was asked to bid on a follow-on contract for another dozen receiver/transmitter units. Ignoring any forgetting factor effects, what should Johnson estimate time and parts costs to be for the dozen units? (Hint: There are two learning curvesone for labor and one for parts.) Use Exhibit 4A.6.

a. How many labor hours should Johnson estimate are needed for the additional 12 units? (Round your answer to the nearest whole number.)

b. How much should Johnson estimate the parts cost will be for the additional 12 units? (Round your answer to the nearest dollar amount.)