Learning Curve

Harriman Industries manufactures engines for the aerospace industry. It has completed manufacturing the first unit of the new ZX-9 engine design. Management believes that the 1,000 labor hours required to complete this unit are reasonable and is prepared to go forward with the manufacture of additional units. An 80 percent cumulative average-time learning curve model for direct labor hours is assumed to be valid. Data on costs are as follows:

Direct materials	$10,500
Direct labor	$30 per direct labor hour
Variable manufacturing overhead	$40 per direct labor hour

Required:

1. Set up a table with columns for cumulative number of units, cumulative average time per unit in hours, and the cumulative total time in hours. Complete the table for 1, 2, 4, 8, 16, and 32 units. If required, round your answers to one decimal place. Use the rounded answers in the subsequent computations.

Cumulative Number of Units	Cumulative Average Time per Unit in Hours	Cumulative Total Time: Labor Hours
1
2
4
8
16
32

2. What are the total variable costs of producing 1, 2, 4, 8, 16, and 32 units? What is the variable cost per unit for 1, 2, 4, 8, 16, and 32 units? If required, round your answers to one decimal place. Use the rounded answers in the subsequent computations.

	1 unit	2 units	4 units	8 units	16 units	32 units
Total variable cost	$	$	$	$	$	$
Unit variable cost	$	$	$	$	$	$