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Pohlman Company makes aircraft engines. Pohlman has noticed that, in general, each new engine design is subject to an 90 percent learning rate. Assume that the first unit produced takes 550 hours, and direct labor is paid an average of $45 per hour.
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(Question and Answer): Cumulative Average Time per Unit in Hours Cumulative Number Cumulative Total Time: of Units 2 4 8 16 32 550 495
1. Set up a table with columns showing: the cumulative number of units, cumulative average time per unit in hours, and cumulative total time in hours. Show results by row for total production of: one engine, two engines, four engines, eight engines, sixteen engines, and thirty-two engines. (Round hour answers to two significant digits.)
Cumulative Average Time per Unit in Hours Cumulative Number Cumulative Total Time: of Units 2 4 8 16 32 550 495 445.5 401 360.9 324.8 Labor Hours 550 1045 1955.91 3615.55 6621.9 12050.9 2. What is the total labor cost if Pohlman manufactures the following number of engines: one, four, or sixteen? Cost for installing one engine Cost for installing four engines Cost for installing sixteen engines $24750 88016 $297985 What is the average cost per engine for the following number of engines: one, four, or sixteen? (Round your answers to the nearest dollar.) Average cost per system for one engine Average cost per system for four engines Average cost per system for sixteen engines 3. What if Pohlman is preparing a bid to build 16 engines? If necessary, round your answers to both parts to the nearest dollar, Calculate budgeted labor cost for an engine design which Pohlman has built before (assume that 16 of these engines had been made previously and the first unit took 550 hours) $ 24750 $20049 $16238 396000 Calculate budgeted labor cost for a new engine design that Pohlman’s workers have never made before (assume the first unit will take 550 hours) s25981