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The following data has been provided by your manufacturing department to estimate the standard cost of producing a particular product
Direct Labor - $20 per hour
The first unit took 0.6 hours of direct labor but you want to base the cost estimate on the number of hours needed for the 25th unit. You expect a 75% learning curve to apply to the direct labor hours.
Overhead – 50% of Direct
Labor Material - $43.75 per 25 units
What is your estimate of the cost to produce each unit? If you company wishes to make a 20% of the manufacturing cost as profit, what should the product be sold for?
Elucidate Average costs are minimized when marginal costs are at their lowest point.
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