Learning Curves: European Electronics estimates the variable cost of producing each unit of a product as follows:

The first unit requires 100 hours to make. Labor time is subject to an 80 percent cumulative learning curve, therefore, Y = aX~ 322 .

Required: Compute the variable costs of making two units, three units, and four units.

Transcribed Image Text:

Materials Direct labor Variable overhead $2,000 per unit $30 per hour $500 per unit plus 80 percent of direct labor costs