Learning Curve (Appendix 1). Skyway Technic, Inc. is planning to submit a bid on equipment to be used in space exploration. Experience on similar contracts indicates that a 70 percent learning curve may be appropriate in estimating labor hours and costs. The first 500 units of this equipment will require an estimated 10,000 labor hours. The next 500 units should be completed in 4,000 hours. Another 1,000 units should follow the 70 percent learning curve, after which the learning process will be completed. The labor rate per hour is \(\$ 20\).

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1. What will be the cumulative average hours per unit after production of the third batch (1,000-unit batch)? (Assume a 70 percent learning curve.)

2. Estimate the labor cost per unit after the completion of the learning process.