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Farah Faucets manufactures high cost, limited production bath fixtures. The company has just completed 5 prototype bathroom faucets and recorded the direct labor ( in

Farah Faucets manufactures high cost, limited production bath fixtures. The company has just completed 5 prototype bathroom faucets and recorded the direct labor (in minutes) for each fixture as follows:
1: 200
2: 140
3: 113.6
4: 98.0
5: 87.4
The company prices their fixtures at $500 per direct labor hour. They have found that this pricing scheme covers labor, material and overhead costs and provides for a suitable profit. Using learning curve theory, how much should the company charge their distributor for the entire production run of 40 faucets, assuming that they can use the 5 prototype faucets in completing the order.
Question 2 options:
$1,090,242
$14,984
$18,171
$14,983
$2,180

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