Question
Eagle Airplane Company has built a new model jet aircraft, which it intends to sell to high net worth clients. This aircraft required 20,000 hours
Eagle Airplane Company has built a new model jet aircraft, which it intends to sell to high net worth clients. This aircraft required 20,000 hours to complete. Eagle believes an incremental unit learning model best reflects the company's production efficiency.
Eagle's manufacturing costs for the second aircraft are presented below.
Direct labor
$
140
per direct labor hour
Variable overhead
120
per direct labor hour
Fixed overhead
200000
per unit
Materials
90000
per unit
Eagle just received a contract to make three more identical aircraft (a total of four were made). The total labor cost for the second unit was $2,240,000.
What will be the total expected unit cost for the 4th aircraft? (Please round to the closest number)
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