Estimate the overhead costs for the first month of program

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Reference no: EM131505528

Question: The overhead costs for a company are presently $X per month. The management team of the company, in cooperation with the employees, is ready to implement a comprehensive improvement program to reduce these costs. If you

(a) consider an observation of actual overhead costs for one month analogous to an output unit,

(b) estimate the overhead costs for the first month of program implementation to be 1.15X due to extra front-end effort, and

(c) consider a 90% improvement curve applicable to the situation, what is your estimate of the percentage reduction in present overhead costs per month after 30 months of program implementation?

Reference no: EM131505528

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