Assume Sundstrand, which manufactures high-technology instruments for space crafts, is considering a sale to Edison in their quest to reach Venus. They have produced a prototype that cost $400,000, which consisted of direct materials of $80,000, direct labor of $200,000 and variable overhead allocated based on direct labor hours of $120,000. They assume an 80% Average time learning curve. They plan to sell Edison the next seven units they produce. They will keep the first one they built in case Grape is ready to make their Venus missions. They want to have their prototype on hand.

REQUIRED:

• Prepare a schedule to determine the total costs of producing that first unit, two units, four units and eight units.
• Determine the cost of the seven units that they plan to sell to Edison, assuming the 80% learning curve and the fact that they are not selling the first unit.