Cumulative Average-Time Learning Curve

Pohlman Company makes aircraft engines. Pohlman has noticed that, in general, each new engine design is subject to an 80 percent learning rate. Assume that the first unit produced takes 500 hours, and direct labor is paid an average of $30 per hour.

Required:

1. Set up a table with columns showing: the cumulative number of units, cumulative average time per unit in hours, and cumulative total time in hours. Show results by row for total production of: one engine, two engines, four engines, eight engines, sixteen engines, and thirty-two engines. (Round hour answers to two decimal places.)

Cumulative Number of Units	Cumulative Average Time per Unit in Hours	Cumulative Total Time: Labor Hours
1	fill in the blank 1	fill in the blank 2
2	fill in the blank 3	fill in the blank 4
4	fill in the blank 5	fill in the blank 6
8	fill in the blank 7	fill in the blank 8
16	fill in the blank 9	fill in the blank 10
32	fill in the blank 11	fill in the blank 12

2. What is the total labor cost if Pohlman manufactures the following number of engines: one, four, or sixteen?

Cost for manufacturing one engine	$fill in the blank 13
Cost for manufacturing four engines	$fill in the blank 14
Cost for manufacturing sixteen engines	$fill in the blank 15

What is the average cost per engine for the following number of engines: one, four, or sixteen? (Round your answers to the nearest dollar.)

Average cost per system for one engine	$fill in the blank 16
Average cost per system for four engines	$fill in the blank 17
Average cost per system for sixteen engines	$fill in the blank 18

3. What if Pohlman is preparing a bid to build 16 engines? If necessary, round your answers to both parts to the nearest dollar.

Calculate budgeted labor cost for an engine design which Pohlman has built before (assume that 16 of these engines had been made previously and the first unit took 500 hours).

$fill in the blank 19

Calculate budgeted labor cost for a new engine design that Pohlman's workers have never made before (assume the first unit will take 500 hours).

____