The direct labor hours to assemble the first Army helicopter are 100,000 hours. The labor rate for the assembly contract is $35 an hour. The contract has an option to deliver 2, 4, or 8 helicopters. Initially, the contracting officer had negotiated for delivery of 8 helicopters but reduced the order to 4 via a contract modification. Calculate the new AUC as a result of this contract change. Calculate the new price per unit based on 10% overhead (or burden) and 5% profit rates. What is the total price of the contract?

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Step 1 Calculate the total labor cost Total labor cost Direct labor hours Labor rate T... View the full answer