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can someone help with this question? The objective of this exercise is to prepare a bid for the building of 1 5 Firefly smart missiles.
can someone help with this question?
The objective of this exercise is to prepare a bid for the building of Firefly smart missiles. Your company built the Firefly prototype because of its experience building an earlier version called Fire smart missiles. When the Firefly missile manufacturing specifications were released, the government also released details of the $ cost in building the Firefly prototype. In addition to direct materials, direct labor, and variable manufacturing overhead, other manufacturing overhead costs were of total variable manufacturing costs. The $ equipment purchased by the government will be made available to the selected contractor.
Direct materials $
Direct labor hours @ $
Variable manufacturing overhead hours @ $
Other manufacturing overhead $ @
Purchase of reusable equipment
Total $
With your highly skilled labor force, the direct labor hours incurred for the prototype should not be assumed for each of the fifteen Firefly missiles because of anticipated learning effects from Fire. Assume that the next fifteen Firefly missiles can be built with the same amount of learning that occurred in the production of the sixteen Fire missiles, the earlier version of the Firefly. The direct labor hours for each of the sixteen Fire ie the older version missiles are listed below:
Unit # Individual Direct Labor Hours DLH For Fire
Cumutive method
Using EXCEL, enter the data for the Fire missiles into two columns labeled as Unit # and Individual Direct Labor Hours.
Add two more columns Cumulative Direct Labor Hours and Average Cumulative Direct Labor Hours Cumulative divided by unit #
Generate a scatter plot of Unit number X and Cumulative Direct Labor Hours.
With a rightclick on a data point within the graph, select Add Trendline and then Power as the trend type from the dropdown menus.
Staying within Add Trendline, select the Options tab and check Display equation on chart and Display Rsquared value on chart.
Now add another column to your data and label it as Individual Direct Labor Hours for Firefly
For each unit, enter the formula aXb where a is the direct labor hours incurred for the prototype of Firefly that is hours X is the unit number your first column you entered and b is the coefficient including its sign if it is negative from the trendline equation you estimated in step above.
The total of units from your estimation in step above is the total direct labor hours for the Firefly missile. As a hint, this number should be substantially lower than the labor hours without a learning curve think what that would be
Prepare a cost sheet with and without learning curve. Include direct material, direct labor, variable manufacturing, and other manufacturing costs.
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