Exercise 3.23 Learning Curve

Bordner Company manufactures HVAC (heating, ventilation, and air conditioning) systems for commercial buildings. For each new design, Bordner faces a 90 percent learning rate. On average, the first unit of a new design takes 600 hours. Direct labor is paid $25 per hour.

Required:

1. Complete the table below showing results by row for total production of: one unit, two units, four units, eight units, and sixteen units. (Round hour answers to two significant digits.)

Cumulative Number of Units	Cumulative Average Time per Unit in Hours	Cumulative Total Time: Labor Hours
1
2
4
8
16

2. What is the total labor cost if Bordner makes the following number of units: one, four, sixteen? (Round your answers to the nearest dollar.)

Cost for making one unit	$
Cost for making four units	$
Cost for making sixteen units	$

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

Average cost per unit for one unit	$
Average cost per unit for four units	$
Average cost per unit for sixteen units	$