Iwalewa Nigeria Plc. has been producing a particular type of engine for one month. The cost incurred has been as follows
Materials 840,000
Labour 112000 hours at NGN8.00 per hour896000
Variable overhead313600
2049600
To date Iwalewa has produced 2500 engines and has identified an 80% learning effect. The variable overhead are recovered on labour hours
You are required to determine
a. Iwalewa costs for further 17500 engines
b. Iwalewa costs for further 24000 engines