Intro to Managerial Accounting Summer $24,$ session $1$

Katarzyna Jedruchniewicz

$06/29/247$:$23$ PM

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forecasting direct manufacturing labor$-$hours for the next six PT$109$s $($A$90\%$ learning curve means $b=-0\mathrm{.}152004.)$

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Requirement $1.$ Calculate predicted total costs of producing the six PT$109$s for the Navy. $($WLJ Boat will keep the first deployment boat assembled, costed at $$1,493,200,$ as a demonstration model for porstial

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Begin by determining the hours used to produce the six PT$109$s for the Navy. $($Round your answers to the nearest whole number.$)$

The total cumulative time in labor$-$hours for seven PT$109$s is $$ hours, therefore, the total time to produce six

PT$109$s is $$ hours

Data table

Direct materials cost

$ $205,000$ per PT$109$

Direct manufacturing labor time for first boat

$15,200$ direct manufacturing labor$-$hours

Learning curve for manufacturing labor time per boat $90\%$ cumulative average time ${?}^1$

Direct manufacturing labor costs

$$45$ per direct manufacturing labor$-$hour

Variable manufacturing overhead costs

Other manufacturing overhead

Tooling costs ${?}^2$

$$21$ per direct manufacturing labor$-$hour

$25\%$ of direct manufacturing labor costs

$ $285,000$

$1$ Using the formula for a $90\%$ learning curve, $b=\frac{ln0\mathrm{.}90}{ln2}=\frac{-0\mathrm{.}105361}{0\mathrm{.}693147}=-0\mathrm{.}152004$

$2$ Tooling can be reused at no extra cost because all of its cost has been assigned to the first deployment boat

Calculate predicted total costs of producing the six PT$109$s for the Navy. $($WLJ Boat will keep the first deployment boat assembled, costed at $$1,493,200,$ as a demonstration model for potential customers.$)$

What is the dollar amount of the difference between $($a$)$ the predicted total costs for producing the six PT$109$s in requirement $1,$ and $($b$)$ the predicted total costs for producing the six PT$109$s$,$ assuming that there is no learning curve for direct manufacturing labor? That is$,$ for $($b$)$ assume a linear function for units produced and direct manufacturing labor$-$hours.