Question: Lambda Computer Products competed for and won a contract to produce two prototype units of a new type of computer that is based on laser
Lambda Computer Products competed for and won a contract to produce two prototype units of a new type of computer that is based on laser optics rather than on electronic binary bits. The company expects learning to occur relative to labor and also relative to the pricing of materials, equipment, and supplies. The first unit produced by Lambda took 5,000 hours to produce and required $250,000 worth of material, equipment usage, and supplies. The second unit took 3,250 hours and used $187,500 worth of materials, equipment usage, and supplies. Labor is $30 per hour. Use Exhibit 4A.6. Lambda was asked to present a bid for 10 additional units as soon as the second unit was completed. Production would start immediately. What would this bid be?
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
