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Eagle Airplane Company has built a new model jet aircraft, which it intends to sell to high net worth clients. This aircraft required 20,000 hours to complete. Eagle believes a cumulative average learning model best reflects the company's production efficiency.
Eagle's manufacturing costs for the second aircraft are presented below.
Direct labor $ 140 per direct labor hour
Variable overhead 120 per direct labor hour
Fixed overhead 200000 per unit
Materials 90000 per unit
Eagle just received a contract to make three more identical aircraft (a total of four were made). The total labor cost for the second unit was $2,240,000.
Question 1: What will be the total expected unit cost for four aircrafts? (Please round to the closest number)
Option A. $4,502,000
Option B. $3,328,000
Option C. $4,212,000
Option D. $3,618,000
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