Question $3($Total $20$ marks$)$

Established around two decades ago, Sunshine Company is a manufacturer of beach chairs. The company has experienced a decline in profits since last year, and so the control of manufacturing cost has become a matter of concern. As a cost accountant of the company, David has to collect, compute and analyse the financial and non$-$financial information pertaining to the manufacturing business periodically.

According to the results based on the "time and motion study" recently conducted by the company, it was found that each new production line worker takes $7$ bours to make the first beach chair and $5\mathrm{.}6$ bours are used to make the second beach chair. For the purpose of computation of the manufacturing cost, David has collected the following information:

Direct material cost:

Direct labour cost:

Manufacturing overhead:

$$63$ per unit of beach chair

$$35$ per hour

$$40$ per hour

It is presumed that the company adopts the Cumulative Average Time Learning Model.

Regeired:

Assuming you are David,

Compute the learning curve percentage?

$(2$ marks$)$

Compute the time needed to make the first nine beach chairs by a new worker.

$(3$ marks$)$

Compute the total manufacturing cost for producing the first nine beach chairs.

$(10$ marks$)$

Assuming there are many competitors in the same industry of producing beach chairs, provide some suggestions to the management for achieving the objective of profit growth by using the "Learning Curve Effect" principle.

$(5$ marks$)$