According to this budget, the new inertial navigation unit is going to cost more to produce than

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"According to this budget, the new inertial navigation unit is going to cost more to produce than its selling price," said the new manager to the production supervisor. The supervisor replied, "That's just for the first 1,000 units, which is at the beginning of the learning curve. The learning rate is estimated at 85 percent, and we should reach the steady state at 10,000 units." "I don't like that at all," said the manager, who had only a vague understanding of learning curves. "You see to it that the learning rate is increased to 90 percent, and the steady state to no less than 15,000 units." As the production supervisor, respond to the manager's request.

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Cost Accounting

ISBN: 9780538817646

2nd Edition

Authors: Les Heitger, Pekin Ogan, Serge Matulich

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