Problem: Manceville Air has just produced the first unit of a large industrial compressor that incorporated new technology in the control circuits and a new internal venting system. The first unit took 116 hours of labor to manufacture. The company knows from past experience that this labor content will decrease significantly as more units are produced. In reviewing past production?data, it appears that the company has experienced an 80?% learning curve when producing similar designs. The company is interested in estimating the total time to complete the next 7 units.
Your job as the production cost estimator is to prepare the estimate.
Total manufacturing time for the:
a) First 8 units = hours
b) Manufacturing time for the last 7 units (2 thru 8) = hours