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10-35 Cost estimation, cumulative average-time learning curve. The Blue Seas Company, which is under contract to the U.S. Navy, assembles troop deployment bosts. As part

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10-35 Cost estimation, cumulative average-time learning curve. The Blue Seas Company, which is under contract to the U.S. Navy, assembles troop deployment bosts. As part of its research program, it completes the assembly of the first of a new model (PT109) of deployment boats. The Navy is impressed with the PT109. It requests that Blue Seas submit a proposal on the cost of producing another six PT109. Blue Seas reports the following cost information for the first PT109 assembled and uses a 90% cumula- tive average-time learning model as a basis for forecasting direct manufacturing labor-hours for the next six PT109. (A 90% learning curve means b = -0.152004.) Home Insert Page Layout Formulas Data Review View B 1 Direct material $ 201,000 2 Direct manufacturing labor time for first boat 15,700 labor-hours 3 Direct manufacturing labor rate $ 43 per direct manufacturing labor-hour 4 Variable manufacturing overhead cost $ 24 per direct manufacturing labor-hour 5 Other manufacturing overhead 15% of direct manufacturing labor costs 6 Tooling costs" $281.000 7 Learning curve for manufacturing labor time per boat 90% cumulative average time 8 9 Tooling can be reused at no extra cost because all of its cost has been assigned to the first deployment boat. 10 In 0.9 -0.105361 11. Using the formula (page 390), for a 90% learning curve, b= In 2 0.693147 =-0.152004 Required 1. Calculate predicted total costs of producing the six PT109s for the Navy. (Blue Seas will keep the first deployment boat assembled, costed at $1,533,900, as a demonstration model for potential customers.) 2. What is the dollar amount of the difference between (a) the predicted total costs for producing the six PT109s in requirement 1 and (b) the predicted total costs for producing the six PT109s, assuming that there is no learning curve for direct manufacturing labor? That is, for (b) assume a linear function for units produced and direct manufacturing labor hours. Require: use Excel to solve problem 10-35 and submit Part 1: Problem 10-35 your Excel file. Note: I should be able to see all your formulas 10-35 Cost estimation, cumulative average-time learning curve. The Blue Seas Company, which is under contract to the U.S. Navy, assembles troop deployment bosts. As part of its research program, it completes the assembly of the first of a new model (PT109) of deployment boats. The Navy is impressed with the PT109. It requests that Blue Seas submit a proposal on the cost of producing another six PT109. Blue Seas reports the following cost information for the first PT109 assembled and uses a 90% cumula- tive average-time learning model as a basis for forecasting direct manufacturing labor-hours for the next six PT109. (A 90% learning curve means b = -0.152004.) Home Insert Page Layout Formulas Data Review View B 1 Direct material $ 201,000 2 Direct manufacturing labor time for first boat 15,700 labor-hours 3 Direct manufacturing labor rate $ 43 per direct manufacturing labor-hour 4 Variable manufacturing overhead cost $ 24 per direct manufacturing labor-hour 5 Other manufacturing overhead 15% of direct manufacturing labor costs 6 Tooling costs" $281.000 7 Learning curve for manufacturing labor time per boat 90% cumulative average time 8 9 Tooling can be reused at no extra cost because all of its cost has been assigned to the first deployment boat. 10 In 0.9 -0.105361 11. Using the formula (page 390), for a 90% learning curve, b= In 2 0.693147 =-0.152004 Required 1. Calculate predicted total costs of producing the six PT109s for the Navy. (Blue Seas will keep the first deployment boat assembled, costed at $1,533,900, as a demonstration model for potential customers.) 2. What is the dollar amount of the difference between (a) the predicted total costs for producing the six PT109s in requirement 1 and (b) the predicted total costs for producing the six PT109s, assuming that there is no learning curve for direct manufacturing labor? That is, for (b) assume a linear function for units produced and direct manufacturing labor hours. Require: use Excel to solve problem 10-35 and submit Part 1: Problem 10-35 your Excel file. Note: I should be able to see all your formulas

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