The Dorben Co. uses a standard hour plan with a base wage of $9.00/hour. It hires an IE consultant to plan a batch production run of 300 units. This consultant has a worker on the line produce two units. The first takes 10 minutes and the second 9.7 minutes.
a) Find the equation of the learning curve?
b) What is the % learning?
c) How long would it take the worker to reach the standard time of 8.0 minutes
d) Assume that the worker tries to improve and earn the incentive pay. What would the worker be paid for the first 20 hours under the standard-hour plan?
e) Assuming that the worker continues to improve his performance, what will he be paid for the full batch of 300 units under the standard-hour plan?
f) What is the unit cost for the first unit made? What is the cost for 300th unit?