Randy has been asked to develope an estimate of the perunit selling price (the price that each unit will be sold for) on a new line of hand crafted booklets that offer excuses formissed appointments.
cost of directlabor $20/hour
cost of thematerial $43.75/batch of 25 booklets
cost ofoverhead 50% of direct labor cost
desiredprofit 20% of total manufacturing cost
a.) use a 75% learning curve for estimating the cost of directlabor
b.) the time to complete the first booklet is estimated at 0.60hour and
c.) the estimated time to complete the 25th booklet should beused as the standard time for the purpose of determining theunit selling price.
What would randy's estimate be for the unit sellinprice?