=+Global Defence manufactures radar systems. It has just completed the manufacture of its first newly designed system, RS-32.

Manufacturing data for the RS-32 follow:

1 2

3 4

5 6

7 8

A B C

$160 000 per unit of RS-32 6 000 ls costairetam tceriD Direct manufacturing labour time for first unit Learning curve for manufacturing labour time per radar system 85% cumulative average timea our costbal gnirutcafunam tceriD our-hourbal gnirutcafunam tcerid rep tsoc daehrevo gnirutcafunam elbairaV our-hourbal gnirutcafunam tcerid rep a

Using the formula (p. 95), for a 85% learning curve, b = = = –0.234465 ln 0.85 ln 2

–0.162519 0.693147 direct manufacturing labour-hours

$ 30

$ 20 Required Calculate the total variable costs of producing 2, 4 and 8 units.