Question Five - Learning Curve Ashford is planning another production run of a new product. They are anticipating a Learning Curve Effect of 70% on the labour costs. Company labour costs are 20 per hour. The first unit took 140 hours to produce. Other unit variable costs for the product are: Materials per unit Direct expenses per unit 350.00 10.82 The labour times are known to follow the cumulative average time model and can be explained by the formula Y = ax where: Y = average labour hours per unit; X = cumulative number of units; a = number of labour hours for first unit; b = log (the learning curve rate) / log 2 Morden are planning the production run in a future period to which the following data applies : Estimated cumulative production at start of period Estimated production in period 175 units 50 units Required: (a) Using the cumulative average time model calculate the estimated unit cost for the new product for the period in question. (b) List the conditions which must be met for the learning curve to operate. Question Five - Learning Curve Ashford is planning another production run of a new product. They are anticipating a Learning Curve Effect of 70% on the labour costs. Company labour costs are 20 per hour. The first unit took 140 hours to produce. Other unit variable costs for the product are: Materials per unit Direct expenses per unit 350.00 10.82 The labour times are known to follow the cumulative average time model and can be explained by the formula Y = ax where: Y = average labour hours per unit; X = cumulative number of units; a = number of labour hours for first unit; b = log (the learning curve rate) / log 2 Morden are planning the production run in a future period to which the following data applies : Estimated cumulative production at start of period Estimated production in period 175 units 50 units Required: (a) Using the cumulative average time model calculate the estimated unit cost for the new product for the period in question. (b) List the conditions which must be met for the learning curve to operate