A company is asked to quote for a special order to be delivered ex works.

Direct material costs per unit of output are:

For total $ %

of each discount 100 18 200 18 400 18 less 10 less 20 The work would be done in two departments:

Dept F Employs highly skilled operators paid at $2.50 per hour z

Units 3

7 hr 10 8

4 4

$

35 165 Each unit of output requires 6 direct labour hours of work for the first 100 units However, experience has shown that an 80 per cent learning curve can be expected to operate G Employs skilled operators paid at $2.00 per hour Each unit of output requires 3 direct labour hours of work for the first 1 00 units Here, too, an 80 per cent learning curve is expected