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Global Defender manufactures radar systems. It has just completed the manufacture of its first newly designed system, RS-32. Manufacturing data for the RS-32 follow: (Click
Global Defender manufactures radar systems. It has just completed the manufacture of its first newly designed system, RS-32. Manufacturing data for the RS-32 follow: (Click icon to view more data) Read the requirements. Requirement 1. Calculate the total variable costs of producing 2, 3, and 4 units. Begin by calculating the cumulative total time in labor-hours. (Round the individual unit time for Xth unit to the nearest whole number.) Number of Individual unit time for Cumulative total time: units Xth unit: Labor-hours Labor-hours 2 3 4 X 1 Data Table Direct materials cost Direct manufacturing labor time for first unit Learning curve for manufacturing labor time per radar system Direct manufacturing labor costs Variable manufacturing overhead costs $ In 0.85 -0.162519 a Using the formula for an 85% learning curve, b = 0.693147 82,000 per unit of RS-32 3,600 direct manufacturing labor-hours 85% cumulative average time 20 per direct manufacturing labor-hour 17 per direct manufacturing labor-hour -0.234465 In 2 Print Done O Requirements 1. Calculate the total variable costs of producing 2, 3, and 4 units. 2. Compare the cost predictions from requirement 1 (incremental unit-time learning model) with the cost predictions of producing 2 and 4 units based on a cumulative average-time learning model. Why are the predictions different? How should Global Defender decide which model it should use? Cumulative average-time learning model's cumulative average time per unit and cumulative total time and total variable cost predictions of producing 2 and 4 units: Number of Cumulative average time Cumulative total time: units per unit: Labor-hours Labor-hours 2 3,060 6,120 2,601 10,404 Variable costs of producing 2 Units 4 Units Total variable costs $ 390,440 $ 712,948 4 Print Done
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