Application of Management Accounting Techniques (HMAC330-1)

Wood-Work Manufacturing produced its first batch of the new Woodies (a coffee table that is believed to be one of the entity's best sellers). Their first batch of 8 Woodies in the 2021 financial year used 16 direct labour hours during the manufacturing process. This batch size will be maintained in the future when manufacturing Woodies. Furniture4Life, in anticipation of the high demand, negotiated with Wood-Work Manufacturing to be the first retailer to sell Woodies and ordered 256 Woodies to be delivered as follows during the respective financial years: The Woodies that have already been manufactured in the 2021 financial year will be delivered as part of Furniture4Life's order as mentioned above. Wood-Work Manufacturing experiences a 90% learning curve for labour in the Woodies manufacturing process. Assume: y=axb y= cumulative average time per unit a= time for the first unit x= number of units b at 90%=0,1520 1.5. The Supervisor in the manufacturing department was quoted saying "I keep on hearing about the leaming curve effect and I still don't get it". Explain the learning curve effect to the Supervisor. (2 marks) 1.6. Calculate the total remaining labour hours required to complete the 80 Woodies that Wood-Work Manufacturing needs to deliver to Furniture4Life for the 2022 financial year. Keep in mind that 8 Woodies have already been manufactured. Use batches to calculate the answer. (5 marks) 1.7. Calculate the total labour hours required to complete all 256 Woodies. Keep in mind that 80 Woodies have already been manufactured in the 2022 financial year. Use batches to calculate the answer. (5 marks) 1.8. Another client placed an order for 24 Woodies. Calculate the cumulative number of labour hours it will require to complete the whole Furniture4Life order as well as this additional order. (4 marks) Round to two decimals where applicable