What would be the total cost of this follow-on contract

Assignment Help Operation Management

Reference no: EM132227005

Atkinson Engineering Company (AEC) develops quick fat burning exercise machine. This exercise machine can burn the fat very quickly with little effort. Gym Fitness Club (GFC) gave first order to supply 12 units. AEC produced and supplied these 12 units to GFC. Three factors involved, technical labor hours, assembly labor hours and cost of material. The first unit produced by AEC took 125 technical labor hours, 45 assembly labor hours and material cost was $1275 per unit. They determined learning rate of 70% in technical labor hours, and 85% in assembly labor hours. AEC pay $40 per hour to their technical labors and $30 per hour to their assembly labors.

Gym Fitness Club placed another order (1st follow-on contract) for 28 units immediately after receiving the first order. Learning in both factors continues and AEC pay rate to its labor and cost of material is not changed.

a) What will be the cost of 10th unit of this follow on contract? What would be the total cost of this follow-on contract?

Reference no: EM132227005

Questions Cloud

How do specific ways of managing the value chain activities : What is value chain analysis? How do specific ways of managing the value chain activities help budget airlines to achieve low cost?

What are the differences between different types of studies : The three types of qualitative research are phenomenological, grounded theory, and ethnographic research. What are the differences and similarities.

Different organizational implementation tools : Different organizational implementation tools should be designed in order to facilitate the implementation of different types of strategy.

What was not known about the clinical problem : Identify the clinical problem and research problem that led to the study. What was not known about the clinical problem that, if understood, could be used.

What would be the total cost of this follow-on contract : What will be the cost of 10th unit of this follow on contract? What would be the total cost of this follow-on contract?

Discuss the true costs of retail employee turnover : Discuss the true costs of retail employee turnover. Provide appropriate examples to illustrate your understanding of how these costs could disadvantage retailer

How given factor might impact effects of prescribed drugs : Select one of the following factors: genetics, gender, ethnicity, age, or behavior. Reflect on how this factor might impact the effects of prescribed drugs.

Which aspects of store exterior are controllable by retailer : Which aspects of a store’s exterior are controllable by the retailer? Which are uncontrollable?

How has health promotion changed over time : Discuss how the concept has evolved to include wellness, illness, and overall well-being. How has health promotion changed over time?

User Account

All Pages