3-16. A firm has recently added a new product to their offerings. Manufacturing reports that production is going smoothly and factory workers are becoming familiar with the manufacture of this product. All expectations are that the current rate of learning will continue and the manufacture of future units will be more efficient (i.e., take less time). The following table shows the results for the first two units produced. (3.4.2)

Unit Produced Time to manufacture (hours) 1 500 2 425 The firm has an order for two additional units. Assuming the pattern of learning curve continues (same rate):

a. At what rate is learning occurring?

b. How long will it take to produce the fourth unit?

c. If the labor rate is $15 per hour, what is the cumulative average labor cost per unit for the first four units produced?