Personnel and equipment were reassigned to other projects

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Lambda Computer Products competed for and won a contract to produce two prototype units of a new type of computer that is based on laser optics rather than on electronic binary bits. The first unit produced by Lambda took 5,000 hours to produce and required $250,000 worth of material, equipment usage, and supplies. The second unit took 3,500 hours and used $200,000 worth of materials, equipment usage, and supplies. Labor is $30 per hour.

a. Suppose that Lambda was asked to present a bid for additional 10 units after 6 months delay since the second unit was completed. During this time, personnel and equipment were reassigned to other projects. What would be the total production costs for the additional 10 units?

Reference no: EM13960669

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