Question

Henderson Equipment Inc. produced a pilot run of 20 units of a recently developed motor used...

Henderson Equipment Inc. produced a pilot run of 20 units of a recently developed motor used in the finished products. The pilot run required an average of 12 direct labor hours per motor. Henderson has an eighty percent learning curve on the direct labor hours needed to produce new motors.

Calculate the average direct labor hours per unit for the first 640 motors (including the pilot run) produced.

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Answer #1
  • All working forms part of the answer
  • For first 20 units, average of 12 direct labor hours
  • Working

Production (units)

Average direct labor hour per unit (based on 80% curve)

Total Direct Labor hours for the given units

20

12

240

40

9.6 [12 x 80%]

384

80

7.68 [9.6 x 80%]

614.4

160

6.144 [7.68 x 80%]

983.04

320

4.9152 [6.144 x 80%]

1572.864

640

3.93216 [4.9152 x 80%]

2516.5824

  • Answer

Total Direct labor hours for 640 units = 2516.58

Total Units = 640

Average Direct Labor Hours = 2516.58 / 640 = 3.93 direct labor hours

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