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Hereford Company is planning to introduce a new product with an 80% learning rate for production for batches of 1,000 units. The variable labor costs
Hereford Company is planning to introduce a new product with an 80% learning rate for production for batches of 1,000 units. The variable labor costs are $30 per unit for the first 1,000-unit batch. Each batch requires 100 hours. There are $10,000 in fixed costs not subject to learning. What is the batch unit time (labor hours) to produce 2,000 units based on the cumulative average-time learning curve?
**Correct answer is 60 hours. I just don't know how to get to this answer. Please help and show all work. Thank you!
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