YYY has the following cost data for a Toy helicopter it just produced
Direct Material per unit
100 hours @ $8 per hour
100 hours @ $2 per hour
The company sold the Helicopter for $2,500.
(round all your answers)
1. The company has just received another contrast for another Helicopter. Assuming that the company is planning to use 80% cumulative Average learning model, what would be the time taken by the second Helicopter?
2. The Company has just received a contract from the defense department to supply 16 Helicopters on a cost plus 50% basis. What would be the total payment made for 16 Helicopters to XYZ using the Cumulative Average Model?
Answer for 1)
My answer is option 80 hours.
Here, it is given that the company planning to use 80% cummulative average learning model=100 hours×80%
Answer for 2)
My answer is option $33830.
Alternatively formula can be used based on the options this way is producing more accurate result.
Here the time taken for first two =
100 hours×80%×2=160 hours
Time take for first for=80% of time taken tome taken for first two=160 hours ×80%×2=256 hours
Similarly for first 8=
256 hours×80%×2=409.6 hours
Similarly for first 16=
Total cost=direct material+direct labour+variable overhead
[(16 units×$1000)+(655.36 hours×$8)+(655.36×$2)]
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