ENGINEERING ECONOMY

CLO $2$

Marks $20$

You have been asked to calculate the per unit selling price of a new line of clothing. Pertinent data are as follows:

$\backslash$table$[[$Direct labour rate,$$15\mathrm{.}00$ per hour$],[$Production material,$$375$ per $100$ items$],[$Factory overhead,$125\%$ of direct labor$],[$Packing costs,$75\%$ of direct labor$],[$Desired profit,$20\%$ of total manufacturing cost$]]$

Past experience has shown that an $80\%$ learning curve applies to the labor required for producing these items. The time to complete the first item has been estimated to be $1\mathrm{.}76$ hours. Use the estimated time to complete the $50$th item as your standard time for the purpose of estimating the unit selling price.