Aproduct that is very labor intensive assembled at boyds aero structure in memphis has an average labor cost of $20/hr.

overhead expenses are charged at 100% of labor at this company

time for the very first unit is 10 hours

time for the fourth unit is 8.1 hours

the learning curve percentage for this operation is

a. 90%
b. 85%
c. 90%
d. 95%

correct answer for learning curve percentage is A. 90%

Explanation:

given data

average labor cost = $20/hr

Time 1st  unit = 10 hours

Time 4th unit =  8.1 hours

solution

we apply here formula for learning curve that is

Time (x)  units = Time 1st unit ×  

so

time 4th unit = Hours 1st unit ×  

8.1 = 10 ×  

ln 0.81 = × ln 4

solve it we get

learning rate = 90%

so correct answer is A. 90%

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