Operations and Supply Chain Management
Operations and Supply Chain Management
14th Edition
ISBN: 9780078024023
Author: F. Robert Jacobs
Publisher: MCG
Question
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Chapter 6, Problem 10OQ

a)

Summary Introduction

To determine: The last unit cost to build.

a)

Expert Solution
Check Mark

Explanation of Solution

Given information:

It is given that first unit took 4,000 hours to complete and the cost for materials and equipment usage is $30,000. Second unit took 3,200 hours to complete and the cost for materials and equipment usage is $21,000. Labor cost is given as $18 per hour.

Determine the last unit (22nd unit) cost to build:

Labor learning rate=3,2004,000=80%

Material learning rate=21,00030,000=70%

Labor cost for 22nd unit=4,000×0.3697×$18=$26,618.40

Machine cost for 22nd unit=30,000×0.2038=$6,114.00

Total amount for 22nd unit=$26,618.40+$6,114.00=$32,732.40

Hence, the last unit cost is $32,732.40.

b)

Summary Introduction

To determine: The average time for the 20 missile guidance controls.

b)

Expert Solution
Check Mark

Explanation of Solution

Given information:

It is given that first unit took 4,000 hours to complete and the cost for materials and equipment usage is $30,000. Second unit took 3,200 hours to complete and the cost for materials and equipment usage is $21,000. Labor cost is given as $18 per hour.

Determine the average time for the 20 missile guidance controls:

Labor cost for20 more units}=(Cumulative value for 22 unitsCumulative value for 2 units)×(Time to producefirst unit)=(11.2301.800)×4,000=37,720

Average labor time=Labor time for 20 more units20=37,72020=1,886 hours

c)

Summary Introduction

To determine: The average cost for guidance control for the 20 in the contract.

c)

Expert Solution
Check Mark

Explanation of Solution

Given information:

It is given that first unit took 4,000 hours to complete and the cost for materials and equipment usage is $30,000. Second unit took 3,200 hours to complete and the cost for materials and equipment usage is $21,000. Labor cost is given as $18 per hour.

Determine average cost for guidance control for the 20 in the contract:

Labor cost for20 more units}=(Cumulative value for 22 unitsCumulative value for 2 units)×(Time to producefirst unit)=(11.2301.800)×4,000=37,720

Average labor cost=Labor time for 20 more units20×$18=37,72020×$18=$33,948

Material cost for20 more units}=(Cumulative value for 22 unitsCumulative value for 2 units)×(Material cost forfirst unit)=(7.8191.700)×$30,000=$183,570

Average cost=Material cost for 20 more units20=$183,57020=$9,178.50

Determine the average total cost:

Average total cost=Average labor cost+Average material cost=$33,948+$9,178.50=$43,126.50

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