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A firm which produces clothes in Maseru has to-date produced 128 dress. The firm has now received an order for 128 dresses. Data in
A firm which produces clothes in Maseru has to-date produced 128 dress. The firm has now received an order for 128 dresses. Data in respect of the first 128 dresses manufactured are as follows: Direct material cost Direct labour (@ M4 per labour hour) Variable overheads @M2.20 per hour Fixed overhead @ M150 per dresses M19 200 The cumulative average time for the first 64 dresses manufactured was calculated as 20 hours per unit. The Gross profit based on the cost price is 25%. Required Calculated the following: a) The learning curve effect or rate. b) The labour hours required to produce the 128 dresses c) The total manufacturing cost of producing the order for 128 dresses d) The cost of producing one dress of the order e) The total expected profit for this order. M8 000 M8 800 M48 40
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To calculate the required values we need to utilize the learning curve concept and the given data The learning curve theory states that as cumulative ...Get Instant Access to Expert-Tailored Solutions
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