Estimating service department labor cost using learning curves The warranty repair de- partment of the Biggie Company experiences a 90 percent learning curve effect on the repair of new products. The company recently introduced a new portable stereo CD player. During the first month of operations, 100 units were returned for warranty service. Although various problems occurred with the units, most units needed minor adjustments or simple parts replace- ments. The average labor time required per repair during the first month was 1.5 hours. Labor cost is $16 per hour. The company expects to receive about 100 units per month for the entire year.

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REQUIRED Compute the total expected labor cost of warranty repairs on the units for the first twelve months of the product's life.