Carson, Inc., uses a learning curve of 80 percent for all new products it develops. A trial run of 500 units of a new product shows total labor-related costs (direct, indirect labor, and fringe benefits) of $120,000. Management plans to produce 1,500 units of the new product during thenext year.
1. Compute the expected labor-related costs for the year to produce the 1,500 units.
2. Find the unit cost of production for next year for labor-related costs.