56. CSO: 1B3b LOS: 1B3e
  Martin Fabricating uses a cumulative average-time learning curve model to monitor labor costs. Data regarding two recently completed batches of a part that is used in tractor-trailer rigs is as follows.
  If the same rate of learning continues for the next several batches produced, which of the following best describes (1) the type (i.e., degree) of learning curve that the firm is experiencing and (2) the average hours per unit for units included in the 201-400 range of units produced (i.e., the last 200 units)?
  57. CSO: 1B3b LOS: 1B3e
  Propeller Inc. plans to manufacture a newly designed high-technology propeller for airplanes. Propeller forecasts that as workers gain experience, they will need less time to complete the job. Based on prior experience, Propeller estimates a 70% cumulative learning curve and has projected the following costs.
  If Propeller produces eight units, the average manufacturing cost per unit will be
  a. $1,647.
  b. $6,860.
  c. $9,800.
  d. $14,000.
  58. CSO: 1B3b LOS: 1B3e
  In competing as a subcontractor on a military contract, Aerosub Inc. has developed a new product for spacecraft that includes the manufacturing of a complex part. Management believes there is a good opportunity for its technical force to learn and improve as they become accustomed to the production process. Accordingly, management estimates an 80% learning curve would apply to this unit. The overall contract will call for supplying eight units. Production of the first unit requires 10,000 direct labor hours. The estimated total direct labor hours required to produce the seven additional units would be
  a. 30,960 hours.
  b. 40,960 hours.
  c. 56,000 hours.
  d. 70,000 hours.