How much discount she could bargain from the supplier

Assignment Help Accounting Basics

Reference no: EM132703204

Upon reaching her office, she presents the following data to you:

Cumulative quantity Cumulative Total Time

15 units 600 hours

30 units 960 hours

60 units 1,536 hours

120 units 2,460 hours

240 units 3,936 hours

You immediately noticed that the figures relate to a learning curve, and asked her about this.

She confirmed that it was a table of learning curve relationship of the department's supplier of a special spare part used by that department.

The department usually purchases 200 to 240 units of that spare part for P10,000 per unit. This amount is highly driven by the labor hours consumed in producing each spare part.

Now, the department is currently expanding its market and planning to double its production. Hence, there is a need to also double the purchase of the spare parts.

The Department Head asks you if you could help her make an analysis on how much discount she could bargain from the supplier for the spare parts.

Required:

Problem 1: How much discount she could bargain from the supplier for the spare parts?

Reference no: EM132703204

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